What Is PayPal Credit & How Does It Work?

It can be a challenge to keep up with all the different payment services PayPal offers because there are so dang many, and new ones seem to come out all the time. PayPal services also frequently change names as they are rebranded or acquired from other companies.

One PayPal service you might be curious about, as it has generated some buzz lately, is PayPal Credit, formerly Bill Me Later. Read on to learn about this PayPal payment option.

What Is PayPal Credit?

paypal credit logo

PayPal Credit is a line of credit issued by Synchrony Bank. This virtual line of credit functions similarly to a credit card, letting you pay for online purchases in installments, rather than upfront in-full.  Approved PayPal users can use PayPal Credit as a payment option whenever they check out using PayPal, either from a website or at a brick-and-mortar store that accepts PayPal.

Note that PayPal Credit is not the same thing as a PayPal debit or credit card.

How PayPal Credit Works

Best PayPal Alternatives Image

PayPal Credit is easy to apply for and start using. But it’s important that you understand a little bit about how PayPal Credit works before you start using this service.

Applying For PayPal Credit

Any PayPal user can apply for PayPal Credit. If you don’t have a PayPal account already, you will be prompted to create one when applying for PayPal Credit. The application is quick and simple: you only have to supply your date of birth, your income after taxes, and the last 4 digits of your Social Security number. Be warned that PayPal will do a hard credit pull, which might ding your credit score a few points. Typically within seconds, you’ll have your approval answer.

PayPal doesn’t have any clearly stated applicant criteria, but applicants with poor credit or limited credit history may be declined.

Once you have been approved and accept the terms of use, PayPal will give you a credit limit of at least $250. PayPal will periodically review your account and may increase or decrease your credit limit.

Note that PayPal Credit is the new name for Bill Me Later, which has been around for more than 10 years. If you already had a Bill Me Later account, you now have a PayPal Credit account.

Using PayPal Credit

Once you have your PayPal Credit account set up, you can use PayPal Credit in conjunction with your PayPal account anywhere PayPal is accepted. You simply need to set up PayPal Credit as your default “preferred” payment option for PayPal, or select PayPal Credit as your payment option when checking out. Some merchants may also prompt you to pay using PayPal Credit instead of your regular PayPal preferred payment option (which is usually linked to a credit or debit card, or your bank account).

You can manage your PayPal Credit settings using a web browser or with the PayPal app. You can also make payments on your balance and see your current credit limit — just like you would for any credit card app you might already use.

As part of its “Cash Advance” feature, it’s possible to use PayPal Credit to send money to someone online using the Send Money tab, the same way you can with any other PayPal Wallet option. You cannot use this feature to send a cash advance to yourself. However, you can receive a cash advance directly from PayPal Credit if you are a furloughed federal government worker: in January 2019, PayPal announced a program whereby PayPal will extend a one-time 0%-interest cash advance of up to $500 to furloughed federal workers via PayPal Credit.

PayPal Credit Terms & Conditions

PayPal Credit requires monthly payments on your balance. You can make the minimum payment at the end of the month, make payments in any other amount whenever you like, or pay your balance in full at any time, similar to a credit card. For new accounts, PayPal Credit has a variable APR of 25.99% on standard purchases and cash advances (at the time of publishing). Being variable, the APR will fluctuate with the Prime interest rate.

PayPal Credit is currently promoting a 6-months special financing offer, in which you won’t have to pay any interest on purchases of $99 or higher for 6 months. You will be charged interest if you don’t pay the balance in full within 6 months.

To send money (Cash Advance) with PayPal Credit, PayPal will charge a flat fee of 2.9% + $.30 US dollars per transaction. This is the same fee you pay when you use a debit or credit card to send money through PayPal.

To qualify for the 0%-interest cash advance for federal government workers, you’ll need to be a U.S. federal government employee with a PayPal Credit account in good standing. This promotion will end once the government reopens and furloughed workers receive their first paycheck, or the $25 million PayPal has set aside for the program has been exhausted.

PayPal Credit Pros & Cons

Pros of PayPal Credit

  • Fast & Convenient: You can use PayPal Credit to make a purchase as soon as you’re approved (usually within seconds). In comparison, you might have to wait a week or longer for a credit card you’ve applied for to come in the mail.
  • Use Anywhere PayPal Is Accepted: This includes thousands of websites and a growing number of brick-and-mortar stores as well.
  • PayPal Purchase Protection: If your online purchase doesn’t match the description or doesn’t arrive, PayPal will refund the full purchase price plus original shipping costs.

Cons of PayPal Credit

  • Low Credit Limit: Unlike a traditional line of credit, PayPal Credit limits are comparable to or even lower than most credit card limits, with most users’ limits ranging from just $250 to a few thousand dollars.
  • Hard Credit Inquiry: The hard credit pull during the application process will likely ding your score several points.
  • Won’t Help You Build Credit: Unlike a credit card company, PayPal Credit does not report your payment activity (positive or negative) to credit agencies.
  • High APR: You can probably get a better APR with a credit card, especially if you have good credit.
  • Risk Of Overspending: You may be tempted to spend more with PayPal Credit than you would with regular PayPal.*

*Note that this pro/con list is from a PayPal Credit user’s point of view. From a merchant’s point of view, there are no major downsides to PayPal Credit, other than the downsides of using PayPal in general (namely, the high transaction fees). However, a potential upside of advertising promotional financing with PayPal Credit as a merchant that already offers PayPal as a checkout option is that PayPal users typically spend more and make larger purchases with PayPal Credit.

FAQ

Can Businesses Use PayPal Credit?

Short Answer:

Yes, your customers can pay using PayPal Credit as long as your business accepts PayPal payments. But when it comes to using PayPal Credit for business purchases, there are better options available.

Long answer:

Businesses that accept PayPal at checkout can offer customers the option to pay with PayPal Credit, either online or in-store. If you accept PayPal as a payment form, PayPal Credit is already available to customers who check out with PayPal at no additional cost to your business.

When a customer makes a purchase using PayPal Credit, PayPal deposits the full amount of the purchase into your account just as with any other PayPal transaction, so there is no added risk to you as a PayPal merchant; accepting a PayPal Credit payment is the same as accepting any other PayPal payment. However, if you make PayPal sales online, you can promote PayPal Credit financing options on your website, which might be of added benefit to businesses that sell large-ticket items online.

How Do You Get Paid With PayPal Credit?

There are multiple ways you can allow customers to pay with PayPal Credit:

  • PayPal Credit At POS: Some, but not all, point of sale systems allow you to accept in-person PayPal payments. Some examples of PayPal-friendly point of sales include Shopkeep, Vend, and of course PayPal’s own PayPal Here.
  • PayPal Credit On Your Website: If you allow customers to check out with PayPal on your website, PayPal will give you promotional banners that let you advertise financing options to your customers. You can also include a PayPal Credit button to prompt customers who don’t have PPC set up as their preferred PayPal payment method to pay using PayPal Credit.
  • PayPal Credit With Mobile Payments: If you accept Google Pay or Apple Pay at your point of sale, and the customer has PayPal with PayPal Credit set up as their default payment method, customers might pay using PayPal Credit using their smartphone.
  • PayPal Credit With PayPal Invoice: When you send a customer a PayPal Invoice, your customer may use PayPal Credit to pay that invoice.

Of course, only customers who have been approved by PayPal Credit may pay with PayPal Credit, and then only up to the amount of their credit limit. Customers who have set up PayPal Credit as their preferred PayPal payment option will automatically pay for all their PayPal purchases using Credit; customers can also choose PayPal Credit in their PayPal Wallet for individual transactions when presented with this option at checkout.

How Can You Use PayPal Credit For Business Purchases?

Businesses might also potentially use PayPal Credit to make business purchases from merchants or vendors that accept PayPal. However, because it is geared toward consumers, credit limits on this line of credit are on the low side and APRs are on the high side. Unless you have a very small enterprise, you are better off getting a traditional line of credit or business credit card to make business purchases.

As another alternative to making business purchases with PayPal Credit, PayPal also offers small business loans ranging from $5,000 to $500,000 with LoanBuilder: A PayPal Service.

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Final Thoughts

PayPal Credit can be a convenient option to have in your virtual wallet if you want to the ability to make purchases with PayPal even when you don’t yet have the funds to do so—for example, eBay businesses frequently make purchases using PayPal. Or, you might use PayPal Credit to finance a large one-time purchase such as a refrigerator.

You can also use PayPal Credit to send someone money, even if you don’t have that money in your account. If you own a business and already accept PayPal, promoting PayPal Credit as an online checkout option could result in higher purchases.

However, using PayPal Credit not an effective way to build credit, as PayPal doesn’t report your payments to credit agencies. Plus, you will be charged heavy fees if you don’t pay off your balance at the end of each month (or the end of the 6-month promotional financing period). If you are looking for a larger line of credit to use for your business, you might want to look at our top-rated business line of credit providers. Or if you’re looking for a more flexible credit option with a lower APR, check out this comparison of our favorite credit cards.

The post What Is PayPal Credit & How Does It Work? appeared first on Merchant Maverick.

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Venmo For Business: Is It Worth It?

Venmo has earned its status at the top mobile wallet and P2P payments app, ranking along with PayPal and Square Cash as easy, free, and trusted ways to move money around and pay back friends or family.

Venmo launched in 2009 and was eventually acquired by Braintree and then PayPal. Despite being owned by PayPal, Venmo is hardly a PayPal clone. With an estimated 10 million users, Venmo combines a social element with its payments platform, publishing a record of the transaction (though not the amount) to its social feed, along with a note or comment (or sometimes just an emoji). If you want a more detailed look at Venmo, check out our Venmo review for more information!

This social network aspect is one of the ways Venmo sets itself apart from its competitors. The company has also more recently begun allowing merchants to accept payments through Venmo — though with some rather stringent requirements. If you’re wondering whether Venmo could be right for your business, you’re in the right place — we’ll talk about what the requirements are to implement Venmo as a payment option at checkout, and what kinds of businesses Venmo is best suited to.

How Do You Accept Venmo For Businesses?

Venmo is both painfully clear and annoying vague about what kinds of businesses are eligible for accepting Venmo payments. For example, there isn’t a list of prohibited businesses (like you’d find with PayPal, Braintree, and Square). However, Venmo also says that “Venmo can be used to purchase items directly from participating approved apps and online stores.”

Be aware that you can’t natively build Venmo acceptance into your website or app. Instead, you need to go through either Braintree or PayPal for payment processing to add this option. Braintree says that the following use cases are not permitted:

  • Selling goods or services in person.
  • Receiving payment for goods or services through the Venmo app.
  • Facilitating peer-to-peer transactions between two Venmo users.

What does that all mean? Essentially it means you can’t use Venmo directly to accept payments. If you, for example, sell Pampered Chef, Scentsy, LulaRoe, or any other kind of product, your clients can’t just send you a payment via Venmo. If you sell something on Facebook, you can’t meet up with someone and hand them the item in exchange for a Venmo transaction. If you want to accept Venmo for payments, you need to follow the appropriate steps and build the payment option into your website or mobile app.

It also means that you can’t set up a service that says “You send us the money (plus a possible convenience fee) and we’ll send it to someone else for you.” It should be pretty obvious that is a no-no, but generally, those kinds of things need to be clearly stated for legal purposes.

The last requirement? You must be based in the US, which a major difference between Venmo and its global parent company, PayPal. Venmo currently isn’t available to users outside the US at all.

Now that we’ve got the basics covered, let’s talk about how to you can actually implement Venmo payments.

Option 1: Accept Venmo Through Braintree

Braintree Payment Solutions (read our review) is a merchant services provider with a special focus on online and mobile payments. The company, as I mentioned early, is owned by PayPal, and its offerings work pretty seamlessly with PayPal’s, but it is a fairly separate entity. For example, you do get a traditional merchant account. (PayPal is a third-party payment processor, which leads to a greater degree of account stability than merchant accounts.) Braintree is global friendly — even if that’s irrelevant in the case of Venmo payments — and it supports a huge array of payment types, both in apps and on the web. As a result, it will take a developer to implement Braintree payments and get the most out of the Braintree platform.

Braintree specifically says that in order to use Venmo, you must be using one of the following SDKs:

  • iOS v4
  • Android v2
  • Javascript v3 

What this means is you can build Venmo into iOS or Android apps, or into web/mobile web payments that use Javascript. Braintree, on the whole, supports several other programming languages as well. Braintree will also allow customers to save their payment information for subscriptions and recurring billing, including Venmo payments.

Finally, Braintree’s standard pricing applies for Venmo transactions, so most merchants will pay 2.9% + $0.30 per transaction unless they’ve already negotiated special pricing. Venmo transactions are settled according to the same terms as Discover card transactions, but you can identify them in your dashboard by looking for the Venmo logo in the payment type.

Option 2: Accept Venmo Through PayPal Checkout

If Braintree isn’t quite what you’re interested in, you can also implement Venmo Payments using PayPal Checkout (formerly known as Express Checkout). Checkout is PayPal’s recommended option if you are adding payments to an ecommerce shopping cart or offering PayPal as a supplemental option to another credit card processor. Keep in mind that PayPal (read our review) is a third-party payment processor and, as such, comes with an inherent risk of account instability — the potential for holds on funds or even an account freeze if PayPal’s system flags any suspicious behavior.

Also, this option still requires a developer and some code work. PayPal has upgraded its Checkout offering with “Smart” customizable payment buttons and contextual tools that will display multiple checkout options — PayPal, PayPal Credit, or Venmo — based on what it knows about a consumer. Currently, Venmo is only available on mobile devices, though that may change in the future. It’s also worth noting that PayPal Checkout doesn’t allow you to present Venmo as a stand-alone payment option. If you’d like this feature, you’ll need to go with Braintree instead.

With Venmo transactions, you’ll pay your standard PayPal rates, which will be 2.9% + $0.30 per transaction for most merchants. (Keep in mind that PayPal does have a micropayments option for merchants whose average transaction sizes are under $10.) PayPal treats them just like all other transactions; currently, they are not identifiable as Venmo transactions. Again, PayPal may change this feature down the line.

Finally, it’s important to note that because Venmo is owned by PayPal, PayPal’s Seller Protection policy applies to Venmo transactions. For buyers, Venmo has its own protection policy, which is the same as PayPal’s in many ways, though Venmo admits there are some differences. Venmo lays out its terms and conditions for merchants in the user agreement if you’d like to take a closer look.

Should You Add Venmo To Your Payments Set Up?

Venmo is a powerful tool. An estimated 10 million users make for a significant userbase that many merchants may want to tap into. But all the same, accepting Venmo for your business only makes sense in certain contexts. You can’t just use the Venmo app to accept payments directly — you can’t process any sort of in-person transaction, as a matter of fact. If you do sell online, adding Venmo only makes sense if you have a very strong mobile user base. For one, PayPal will only display Venmo as a checkout option for mobile devices. Second, there’s no sense in adding Venmo if your customers don’t even know what a mobile wallet is.

However, if you do have a mobile app and your audience is young, tech-savvy and social, adding Venmo as an option makes a lot of sense. It’s available on both Android and iOS, and if you go through Braintree you can present Venmo as a standalone checkout option rather than as a payment option that is linked with PayPal.

It’s pretty likely that we’ll see Venmo sinking more resources into its business platform in the coming year, so we could very easily see some changes to Venmo’s requirements for business. If you’re still on the fence about Venmo, there’s no rush! Familiarize yourself with the product and wait to see what else Venmo has in store before you make a decision.

Have questions or comments? We always love to hear from our reader base, so check out our comment guidelines and leave us your thoughts!

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What Is Chase Pay And How Does It Work?

The Chase Pay app is a digital wallet developed by Chase Bank. Instead of having to take out your wallet, find your credit card, swipe, and wait, a digital wallet like Chase Pay works by scanning a QR code on a smartphone or with a tap using near-field communication (NFC) technology at a credit card terminal.

Through this post, we are going to explore why accepting digital wallet payments can be a good move for business owners and why the digital wallet offered by Chase Pay is a great option for customers and merchants alike.

The Evolving World Of Digital Wallets

It is no secret that the world of payment processing is evolving quickly. Non-cash payments are becoming commonplace, but that doesn’t mean that we’re diving into a cashless system quite yet. The reality is that half of payments made are still paper-based or manual, according to JPMorgan Chase. Despite their continued use, these manual types of processing transactions represent a more expensive way to do business, cost more working capital from businesses, and take more time to settle the payment between the seller and buyer.

In other words, digital wallets can be a cost-saving option. However, with any new technology, it takes time for users to adapt. Businesses must figure out what will work best for them and consumers are often set in their ways, so all of this momentum to digital wallets will take a few years to build. Currently, most people are exploring their options, but the digital wallet trend is on the rise.  

Chase Pay provides new opportunities to settle things faster electronically (and less expensively) and it can also make life easier for the people who use it, offering faster ordering and pick-up times, a quicker check-out process, and built-in reward and discount programs.

Read on to find out more about Chase Pay and how it can help you improve engagement and offer a better incentive for customers.

Chase Pay For Customers

Chase Pay offers digital wallet and online payment options. Through the Chase Pay app, customers can pay with only their phone by tapping (if linked to Samsung Pay) or scanning a QR code.

You can combine all your Chase-eligible cards, wallets, loyalty programs, and rewards so you can apply what you need quickly at checkout. No more fumbling for the loyalty card on your keychain while also digging your card out of your wallet. Not only that, Chase often runs promotional deals to encourage first-time users to shop in more places.

To sweeten the deal even more in this competitive digital wallet space, Chase Pay also recently introduced Chase Offers. Once you are in your app, you will see any offers available to you and can click on an offer to activate it. The offer appears as a statement credit after 7-14 business days. You don’t need to register, use any vouchers, or apply any codes. Once you activate an offer you like, it is applied whenever you make a purchase with Chase Pay.

These offers are not the same as (and don’t replace) your rewards. You continue to earn any rewards on your purchases through Ultimate Rewards points, your miles, or any other reward program you’re enrolled in.

Where To Shop With Chase Pay

The selection of shops, big-box stores, and restaurants that accept Chase Pay is somewhat limited at this point. However, there is still a decent list of merchants that accept Chase Pay, including big names like Starbucks, Shell gas stations, and Walmart. Within the app, you can also search for places near you that accept Chase Pay, so you will likely never have a shortage of shopping options.

Samsung Pay + Chase Pay:

Since your Samsung Pay account can be linked with your Chase Pay account, this option opens up literally millions of shopping options for you (Samsung Pay has a much larger footprint). Linking these accounts also makes life easier because you can check-out with a tap rather than a QR scan.

Chase Pay For Business Owners

It’s important to note that Chase Pay doesn’t work when it comes to purchasing with your business accounts or under your business profile. But it may be worth your while to consider setting up Chase Pay to process in-store or online orders for your customers! Now, more than ever, customers are making more inquiries into the types of payments accepted.

According to a recent Forrester estimate, mobile payment transactions continue to skyrocket and will triple to $282.9 billion in only a few short years. That means that the expectations from customers are only going to get stronger when it comes to check-out options. It is also important to make sure you are giving your customers a choice when it comes to cashless payments.

Most of your customers don’t have just one line of credit, so why limit the way they can pay you? Offering several types of payments options, including Chase Pay, for both in-store and online shopping can make things easier and more accessible for your customers. 

Engage More Customers

Retailers are spending increasingly more time vying for customer loyalty and seeking engagement ROI through mobile, cashless payment. Here at Merchant Maverick, we like Chase Pay because it can provide some extra exposure for your business while giving customers more incentive to buy.

Depending on your industry, you may be able to take advantage of partnerships Chase has formed. For the food industry, for example, Chase has partnerships with LevelUp® and TouchBistro® for order-ahead, loyalty programs, and additional special offers to apply for your customers.

Grocery and retail stores can let their customers take advantage of contactless or QR payment options. Setting Chase Pay up at your store shouldn’t be a hassle, because it likely works with your existing terminal. If your current credit card terminal accepts chip cards (EMV) the odds are good it’s also configured to accept NFC/contactless payments.

 

All of these options let you give your customers more convenience through pre-ordering or faster checkout. People are driven by convenience and saving time, and customer expectations are only going to increase these next few years.

Getting Started With Chase Pay

Ready to check out the Chase Pay app for yourself? Head to the Apple or Google Play app store and download the app. You’ll need to log in with your Chase account username and password. If you have more than one card through Chase, you’ll also be able to select your default payment card. You will also be able to select the card you want to use when it is time to pay.

If you want to explore more payment processing options for your business, check out our post, Payment Processing Companies and Services for Small Business. 

The post What Is Chase Pay And How Does It Work? appeared first on Merchant Maverick.

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How to Accept Credit Cards For Your Taxi Business

 

credit card processing for taxi drivers

If you are a taxi driver, there is no shortage of options when it comes to accepting credit card payments from your customers. But the truth is, point of sale solutions don’t all offer the same type of features and benefits. And when you consider that most customers today whip out their credit card when it’s time to pay the bill, finding the best credit card processing company for your taxi business is really important.

If you’re a taxi or ride-share driver looking for a good payment processing app, we’ve created this post just for you — read on for an overview of some of the features you may want to look out for when you choose a processing company for your taxi business. At the end of the post, we’ll also tell you which company offers the best processing features (and value) for your money — and why.

What Makes A Good Mobile Payments Processor?

Mobile App & Card Reader

Of course, the most essential thing to have when accepting payment in your taxi is good, basic functionality in the mobile app and credit card reader you’re using. First things first: Look for a reader that is compatible with the mobile device on which your software is installed — whether that is your iPhone or Android phone, iPad, or another type of tablet.

You will also want to pay attention to any costs associated with the card reader itself. Are the reader and app free to use? If not, could you get a better deal elsewhere? Read our article on the best credit card readers for more information about choosing good hardware.

As a taxi driver, the ability to accept multiple types of payments is important for the convenience of both you and your customer, but you need to be able to count on it to work wherever you are. It’s critical to choose a company that has built up an excellent reputation through reliable and secure service.

Of course, it’s critical to consider things like rates, fees, usability, and other bells and whistles that might come along with your service, so keep reading to find out more about what makes a good credit card processing solution for your taxi company.

Offline Mode

Mobile credit card readers are built to go wherever you do, but that doesn’t mean they are always going to function if your internet service gets interrupted. Since you can’t always rely on the connectedness of your device, finding a credit card reader that also works offline is a must.

You may be asking, ‘So how does it work if you are offline?’ If a card reader has an “offline mode,” you can still swipe payments without worrying about a spotty connection (or just re-swiping and crossing your fingers). Connection problems don’t just affect taxi drivers and other mobile businesses — they can affect brick and mortar businesses as well. Having an offline mode takes some of the worry and the hassle out of accepting payments, so you never have to worry about a disconnection interfering with a sale.

Low Processing Rates

One of the first questions anyone should ask when it comes to credit card processing is, of course, how much does it cost? After all, it is your business and your bottom line, so understanding all of the fees that come along with your service is important. Taxi drivers understand better than many business owners what high processing fees can do to earnings.

Many processing companies charge exorbitant rates per transaction, leading some people to stick to cash transactions and avoid processing credit card payments altogether. Thankfully, not all processing companies are out to screw you over — we include our best recommendation at the end of the post, so keep reading if you are curious!

Look for a company that has easy-to-understand rates, with preferably no added monthly fees. Nowadays, you also should look for freedom when it comes to contracts. As a taxi driver, you shouldn’t be bullied into signing a long-term contract with any credit card processing company. In fact, a contract of that sort is often a red flag that there may be more hidden fees once they hook you, so avoid these high-pressure tactics if you can.

Educate yourself before you begin negotiations with any potential payment processor. Read our Complete Guide To Credit Card Processing Rates and Fees, check out our infographic on payment processing fees for a visual overview, or download our free eBook, the Beginner’s Guide To Payment Processing.

Intuitive Tipping Functionality

One of the great things about accepting payments through a mobile reader is that tipping is made easy for your customers. Tips can add up to a pretty big chunk of your take-home pay if you drive cabs for a living, so pay close attention to any app you are considering when it comes to the tipping experience. Look for an app that offers up some preset tip amounts first but also allows your riders to choose a different amount if they want. When an app suggests a pre-set percentage, it removes any mental math skills and makes it even easier to tip you at the end of the ride.

Customer Experience Feedback

Another perk to check out when you are shopping around for the best mobile app for your taxi company is the feedback function. Does the app allow your customers to rate the drive or give you any input? If there are any issues, resolving them directly with you through the app is preferable to a customer posting a public review or calling your company. These customer feedback functions can also show you how you or your staff are doing each day and over time— and allow you to communicate with your customers about their experience directly.

Backend Reporting

Nowadays, when it comes to finding the right mobile processing app, there is so much more available than just the swipe feature. Check out some of the other services that may come along with the app, like reporting and analytics. The ability to track sales history and amounts, see peak service times, store customer data, and create other insights can be powerful tools to help you make better decisions. 

The Best Mobile Payment App For Taxis & Ride Shares

With all of the potential benefits — and pitfalls — in mind listed above, there really is only one company that offers the whole package. When it comes to credit card readers that deliver more than just a swipe function, our favorite payment processor is Square.

Best Overall Mobile POS


Review Visit Site

Highlights

  • No contract or monthly fee
  • Instant account setup
  • Retail upgrade available
  • Restaurant upgrade available
  • For iOS and Android mobile devices
  • 2.75% per in-person card swipe

Retail POS: Free trial ($60/mo value)

 

Restaurant POS: Free trial ($60/mo value)

 

Square POS: Always free

Square has some of the lowest rates with no surprise monthly charges or hidden fees. Not only are costs low, but you can also get your funds deposited directly into your bank account in as little as one or two business days. Also, fees are the same no matter what card you take —  and yes you can start taking every major credit card, including American Express. With the free Square POS app, it is just 2.75% per swiped, dipped, or tapped transaction — and the card reader itself is free.

We like that when you take payment, the offline feature is backing you up in the event service is interrupted. Keep in mind that with Square, no data is saved to your device, so you can be confident you are offering a fully secure and PCI compliant solution.

We also like that with Square POS, you get access to analytics that you may not have had before. For instance, the Square dashboard feature makes it easy for you to see every time you or any other driver connected to your account to process a payment with Square. At the Square dashboard, you can see this activity happening in real time. The simple charts allow you to quickly determine peak times and sales activity for each driver (or yourself), so you can make better decisions when it comes to scheduling.

If you want to check out a little bit more about Square before making a decision, check out our other resources, including How Much Does Square Charge, and How Does Square’s Instant Deposit Work? By doing a little research and checking out the features most important to you, you can find the best solution that you are comfortable with — and that makes your life a lot easier.

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

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Why Square Is A Great Free POS For Markets And Grocery Stores

As a small business owner who is launching a new shop or exploring your payment processing options, finding the right POS to accept payments is not a decision to be made lightly. You probably already know that the grocery industry has its own unique rewards and challenges. Keeping up with supply and demand, getting your name out there, competing with the bigger brands, and strengthening your own brand recognition takes time, energy, and a lot of know-how. Fortunately, Square offers a fantastic POS option for markets and grocery stores that goes way beyond just the swipe.

Read on to find out how Square payment processing tools can benefit your business whether you are opening a pop-up shop, have a brick-and-mortar store, or take your culinary delights on the go to farmer’s markets and trade shows.

Square’s Free Point-Of-Sale Reader & App

Square is best known for the free Square Point of Sale app and the free Square Reader. Square’s iconic white reader plugs into a smartphone or tablet to make mobile payments possible. The Square Point of Sale app allows you to “swipe, dip, or tap payments” whether or not you have an internet signal. If you run into a spotty WiFi connection or have a service interruption, you don’t have to worry about a line bottleneck because the app can securely save data offline.

For the smaller to mid-size shop, the Square Point of Sale app has everything you will need and then some. We dive into all of these features below, so keep reading for a closer look at how Square gives you better control over more parts of your business, from inventory management to sales, employees, and even more.

We’ll also take a look at how Square can also help you completely run or supplement your marketing campaigns with an all-in-one solution that can integrate a loyalty program and private customer feedback. Most of these perks (except for the loyalty program option) are all “in-the-box” features that you won’t pay anything more to use with your free POS Square reader.  Let’s dig in!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

Track Inventory

One thing will never change — people love to eat. However, keeping your supply up-to-date can be a challenge when it comes to balancing the ebb and flow of demand. Your customers come in for a specific product or ingredient; making sure it’s always there for them builds loyalty and trust. Managing inventory can be tricky if you don’t have the right tools.

Thankfully, Square builds inventory management right into their product, so you don’t ever have to think twice about shopping around for a suite of tools. It’s easy to set up your inventory — you can bulk import all of your products with a CSV spreadsheet and make any adjustments to name, prices, or quantities as needed. Once your inventory is saved, you can also set low-stock alerts so that Square will let you know if you’re running low on a product. The best part is that you can determine what constitutes “low stock,” whether that’s six of an item, or 100! You’ll also always be able to take a peek in real time at what — and how much — of your products are selling.

Square’s inventory also supports variants and modifiers. Variants are helpful if you carry a product that comes in different flavors or sizes — you can keep the item listing centralized, but still track quantities of each flavor or size and see which ones are most popular. You can even set different pricing for each variant, as appropriate. Modifiers are more applicable to restaurants and cafes, but if you run a small boutique store and want to upsell customers on special bundles or extra discounted products, you could add them as modifiers.

Square’s inventory system allows you to upload photos for each product, and on a tablet you can configure the layout of products. However, if you don’t like browsing for the right item, you can also attach a barcode scanner. While the free Point of Sale App doesn’t have native label printing, you can find several viable workarounds.

Also, if you sell products in bulk, it’s important to know that Square doesn’t currently support tracking partial increments of a product, or selling by weight. Again, you can find workarounds for this, one of them being the variable price point feature. With the variable price point, you can create an item and track sales, but the POS app will prompt you to enter an amount for the sale when you select the item.

Finally, if you have more than one shop, you can take advantage of the free multi-location inventory management tools. Square allows you to set up individual preferences for each location, including taxes. You can build your inventory from Square’s centralized item catalog and adjust pricing and availability as appropriate. Plus, you can run reports to see sales by location, POS device, or even by individual employee (you’ll need an Employee Management subscription for that last report.) 

The best part is that you can control all of this — every location, all of your inventory, all of your devices — from your Square Dashboard, which is a free web portal. Below we also cover a little bit more about the dashboard — including how it helps you keep track of employee sales, tips, peak sales times, and more.

Square Dashboard

The Square dashboard gives you an integrated look at many aspects of your store — and these reporting and analytics features are all free. You can view your stats in real time and see what is going on in your store — or stores — simply by visiting the Sales tab in the dashboard. Whether you want to dig into the data or you just want a quick visual representation of sales, you can find what you need, fast. You can access reports, view all types of transactions, and keep track of deposits all by quickly scanning the three tabs at the top of your dashboard.

The reports tab breaks all of your data down into simple graphs and data to view aspects of your shop, including:

  • Sales Summary: Your sales summary report is updated in real time and can be viewed by day, month, or year.
  • Sales Trends: See your sales performance in daily, weekly, or yearly views.
  • Payments Methods: This report displays how your customers pay and any fees associated with the transaction.
  • Item Sales: Allows you to find out how well any individual product is selling.
  • Category Sales: Get a quick pie-chart view of which categories are bringing in the most sales such as appetizers, side dishes, or drinks, for example.
  • Employee Sales: This report breaks down tips, hours worked, and when an employee’s sales peaked for the day. (Note: You need to subscribe to Square’s Employee Management to access these features)
  • Discounts: Running a promotion? This report tells you how often your customers use a discount, coupon, or another offer when they buy. (More about loyalty programs through Square later in the post.)
  • Taxes: This report breaks all of your tax information down by the type, amount, and records any non-taxable sales in one spot.

Square also allows you to create your own custom reports, so if you want to see certain pieces of information together, you can tell Square to compile that report for you, and even how often to send it.

Don’t forget that the Dashboard is also the centralized management hub for all of your other Square services, including invoicing, employee management or payroll, and any other tools you might be using.

Built-In Marketing Engagement

One of the interesting aspects of Square’s platform is its customer engagement tools, the foundation of which is the customer directory. With Square POS, you can keep a record of all your customers, with their name, phone number, email, purchase history, and even card details, if you prefer (and your customers agree to store the card on file). You don’t need to have Square’s loyalty program to activate this feature, and it comes at no charge. It’s a great way to keep notes on regular customers and their preferences, to see who your most loyal customers are and who spends the most money in your store. 

If you’d like to build marketing campaigns to reach out to your regulars, your new customers, or even lapsed customers, Square has the tools built right in, plus all of the data right at your fingertips. Square’s marketing services start at $15/month, which is a pretty reasonable price. The price will scale with your use of the marketing services.

With the marketing tools, you can segment your customer list and target people automatically with offers to get them in the door. So whether you are welcoming a new customer or re-engaging a customer you haven’t seen in a while with a with a special discount, Square lets you tailor your marketing message to people at different spots in the buying journey.

The email tools are simple — you don’t have to understand how to set up multiple campaigns because Square streamlines the creation process for you through prompts. They give you a lot of template designs to choose from and even have some holiday and special occasion suggestions. You can send out a one-time email for a birthday or set up recurring email campaigns that encourage more interaction and more opportunities to buy from you — it all depends on how you want to run your business. 

Finally, when it’s time to review the success of your email campaigns, Square reports show you how many opens and clicks you get, as well as how many people redeem your offer.

Receive & Manage Feedback Privately

The Feedback feature can be helpful if you want a way to take charge of the customer experience and try to eliminate the troubles they encounter. It allows you to personally engage your customers — while keeping everything private. When you enable feedback management, customers who receive digital receipts also receive an invite to provide private feedback about their experience.

You can then resolve any issues between just you and your customer and hopefully make them happier and engaged. The idea behind this is that it is much easier to respond to private feedback than having to keep track of and respond to negative public feedback. Most customers appreciate being acknowledged whether the experience was good or bad, and if you do have an unhappy customer, you can make it right with a full/partial refund or a coupon for a discount on their next purchase. You can check the customer database to see what their purchase history is like and make a determination of the best offer to send. 

Best of all, the feedback management feature is totally free to use!

Square Loyalty Program

Square encourages customer engagement and sales in yet another way — a loyalty program. The pricing structure of Square’s loyalty program is based on the number of loyalty visits, starting at $25/month. Costs automatically adjust with the participation of your customers, and you can always track the success of any program at your dashboard to see if you’re getting your money’s worth.

Square’s loyalty program is very flexible and allows you to tailor rewards to your business and your branding. You can opt for something as simple as a digital punch card, where customers earn a reward after so many purchases, or you can structure a more advanced reward system that allows your customers to collect points and cash in their rewards when they want. You can even let them choose from multiple tiers — they could opt for two lower-tier rewards, or spend all their points on a single higher-tiered reward. 

However you choose to structure your rewards program, you can track the performance on your dashboard. You can see how many customers enroll, how often customers redeem rewards, and how many subsequent repeat visits you’re getting. 

According to Square, customers who join their loyalty programs spend 37% more after they join it. Across the board, loyalty programs continue to work for businesses of every size to encourage repeat business, and we think that it’s definitely worth giving it a try for a while and seeing if it works for your business.

Fully PCI Compliant & Secure

When dealing with credit card processing companies, one of the biggest questions most business owners have has to do with safety and security. You want to know that your data is secure and your customer’s payment information isn’t going to be compromised, because when it all boils down, the burden is on you to make sure that you are PCI compliant. “PCI” is shorthand for the Payment Card Industry Data Security Standard (also sometimes called PCI DSS). No matter how big or small your business is, if you accept credit cards, you have to follow the best practices of the industry when it comes to security — and you can face penalties if you don’t.

To remain secure and compliant for each credit card you take, you have to follow the security guidelines when you swipe, key in, store, or transmit their card data. For starters, data must be encrypted properly at each stage of processing and storage, and each year the standards change.

The whole security and compliance issue can be expensive for the smaller to midsize business, and for some, the issue is intimidating enough that they avoid credit card payments altogether.

The great news is that when Square offers you their product or service, they are taking the burden of PCI compliance on themselves when it comes to their hardware and app. Square is an industry leader in security and compliance. Their team participates on the PCI board itself and has an inside view into the ever-changing world of data security. What that means for you is that when you use Square, you don’t have to jump through any other security hoops — Square maintains PCI compliance and does the work for you. You won’t even need to pay any PCI compliance fees. 

Cost Per Swipe & Getting Started With Square

Getting started with the Square POS app and the reader you will use to swipe your customer’s cards is entirely free. Square continues to remain a favorite among small business owners because they don’t charge sign-on or monthly fees for their free POS reader or app — and they don’t make you sign contracts and punish you with charges if you decide it’s not for you.

If you bring your own smartphone or tablet and combine it with one of Square’s mobile card readers, you’ll pay 2.75% for each swiped, dipped, or tapped transaction. If you opt for one of Square’s all-in-one hardware systems, such as Square Terminal or Square Register, you’ll pay slightly different rates. With Square Terminal, swiped, dipped, or tapped transactions process at 2.6% + $0.10 per transaction.  If you want to know more about all of Square’s different card readers and hardware, check out A Guide to Square’s Credit Card Readers and POS Bundles.

Considering that these are pretty low rates to begin with, and there are so many additional built-in features like dashboard analytics, invoicing, the customer database, and inventory management, we think that is a pretty sweet deal for any grocery store looking to expand.

If you are curious and want to dig even deeper, check out our Square review or visit the Square Point of Sale page and sign up for free to see how it all works for yourself!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post Why Square Is A Great Free POS For Markets And Grocery Stores appeared first on Merchant Maverick.

“”

How Does Customer Financing With Square Installments Work?

Square is best known by online sellers and brick-and-mortar shops for its secure credit card processing solutions. With a free mobile point of sale app — and free credit card reader–, Square has made it easier for the everyday small business owner to start taking credit cards. Card readers like Square’s also make it more convenient for shoppers to buy without carrying cash. That can be a win-win for everyone involved with the sale.

Because a business owner no longer has to purchase an expensive POS system to process credit card payments, it’s no wonder that the use of Square has rapidly grown over the last few years. In fact, a surprising number of businesses still did not accept credit cards at the time Square was launched. For a solo entrepreneur or a smaller shop, it used to be a lot more expensive and time-consuming to get started (not to mention more than a little intimidating, given PCI compliance and other regulations). Nowadays, you can find these portable credit card readers everywhere — from your favorite ice cream place to high-end boutiques, salons, and even consulting agencies. If you’re buying at a local shop, there is a good chance that Square is the company processing your payment.

In typical Square fashion, Square Installments provides a more accessible option for businesses that want to offer financing to their clients. If your company sells higher ticket items — from $250 to $10,000 — and you’d like to offer on-the-spot approval and financing to your customers, read on to find out more about Square Installments. But first — a little primer on customer financing.

What Is Customer Financing?

Before we dig too deep into Square Installments, let’s cover the basics of customer financing. By financing a purchase, customers can take home a product or use a service right away without paying for it in full at the time of purchase.

A common example of customer financing would be heading to the dealership and leaving with a new-to-you car — and a payment plan for the next three years to pay it off. Getting the newest version of your phone and rolling payments into your mobile phone bill is also another (more painless) way to finance an upgrade for your phone with less sticker shock.

Financing makes things a little easier on your customer, but it shouldn’t require you to wait for the cash. When you offer to finance through a third-party like Square Installments, you sell your product or service and permit payment to be settled directly between the lender (in this case Square Capital) and your customer. Square pays you in full at the time of purchase.

Financing customers is all about convenience and accessibility. For your customers, financing can make large ticket items easier to purchase with predictable monthly payments spread out over time. Instead of shelling out the entire lump sum, they have more time to pay. This makes for an easier sell for your salesperson and a more comfortable decision for your customer.

When a purchaser thinks about what they are buying in terms of monthly vs. the total amount of dollars, financing can significantly lower the “sticker shock.” Giving purchasing flexibility to your customers will make buying from you a more attractive and accessible option — and of course, that’s good for your business, too.

Companies that invoice monthly payments for ongoing services are also offering a financing option to their clients, in a way. Yet anyone who has a business model based on retainers or monthly agreements knows that sometimes when the bill comes due, it doesn’t always get paid — possibly because the person you invoiced has bad credit or is in financial trouble. These issues can be virtually nonexistent when you let Square Installments pre-screen and approve your clients — and take on the financial risk.

Read on to find out how Square Installments works and how much it costs so you can decide if Square Installments services are right for you.

How Does Square Installments Work?

There are two ways you can use Square Installments for your business: at the point of sale or via Square Invoices. Once you sign up for Square Installments, your business will get a custom URL. This web address is just for your business and is the link you’ll send to every customer who wants to apply for financing.

The Square Installments Process For In-Store Sales

Once you share the link with your customer, they’ll follow the instructions from their smartphone and fill out a short online application. In almost all scenarios, customer approval happens in real time, right when they’re ready to purchase at your shop.

If approved, they can accept one of the financing options on offer and will receive a one-time-use number for a digital card they use to pay you for their purchase. The number is valid for seven days, and your customer can only redeem it at your business.

When your customer is ready to buy, they’ll present you with the digital card number given to them by Square Installments; you will key that number directly into your Square Point of Sale app, online through Square API, or through your virtual terminal.

Square pays you in full for the amount at the time you process the approved application.

Square Invoices From Square Installments

Square Invoices allows you to send your customers invoices through Square as well. After you are approved and set up, the option for installment payments will appear on your invoice automatically. Once your customers receive your invoice, the process is similar to the one above — they fill out an online application, can pick a plan, and once approved, you get paid upfront and in full.

To spread the word, Square will also send you some free marketing material — both in print and in the form of a banner for your website so your customers won’t miss this new option for buying with you.

You Don’t Need To Be A Financing Expert

Worried about the fine print and fielding financing questions? Don’t be. If your customers have questions about Square Installments, they’ll contact Square directly. In fact, because this is considered a “highly regulated financial product,” it’s essential to pass any questions or concerns off to Square’s own customer service folks. And of course, this arrangement means you’re not burdened with the nitty-gritty details of financing or payment collection.

How Much Does Square Installments Cost?

If you’re a business owner considering whether or not the cost is worth the convenience of the service, here are some figures to help you crunch the math.

Square Installments for Square Invoices costs 2.9% of the purchase price plus $0.30 per transaction. Square Installments at your Point of Sale costs 3.5% of the purchase price plus $0.15 per transaction. If a custom rate applies to your business for keyed-in Square Invoices transactions, this rate also applies to any Square Installments transactions.

The good news is that there are no recurring monthly usage fees or long-term commitments. You can cancel the service any you time want with no fees or contracts for your business to worry about.

For a customer who is considering using Square Installments to pay for a purchase, the annual percentage rate will vary depending on a few different factors. However, every customer will have more three options when it comes to repaying the loan. Square makes things upfront and easy to understand for the borrower, with ease of use in mind.

Should You Use Square Installments?

Small Business Owner Using Square Customer Service

The main benefit of Square Installments is that customers can pay over time — making them more likely to buy and making your business more likely to sell more inventory. Whether to break up payments for a big purchase that a customer normally couldn’t afford, or simply to offer a convenient option other than cash or checks, financing through Square Installments can be a valuable tool for your sales team to leverage.

When the average business owner thinks about customer financing, one of the biggest concerns is that the customer gets possession of the product or service without paying in full. While that may be a concern if you offer in-store financing and manage it yourself, in this case, Square takes on the financial risk entirely. You get paid right away and let Square manage the installments.

There are some important things to keep in mind when you consider whether Square Installments services are right for your business, however. As noted above, Square Installments isn’t free. Also, keep in mind that Square Installments is only applicable for purchases between $250 and $10,000 — so businesses that deal with higher ticket products or services will need to consider other options for financing.

When you make the final decision to use Square Installments, consider the benefits vs. the costs. Here are a few questions to ask:

  • Would your target market and current customers likely make the purchase anyway? (In other words: How “warm” or “cold” are the people who come to your online sales page or place of business?)
  • Does opening up financing options also open up the possibility of a new target customer or a larger final sale?
  • If you send out invoices, will Square Installments give you a more convenient or secure option to take secure payments and prescreen users, despite the cost?

For any business owner, the benefits and conveniences should outweigh the cost of Square Installments per sale. Because you don’t need to sign any long-term contracts to use Square Installments, it might be worth it to try the service for a bit, see what you think, and compare sales over the next few sales cycles to be sure either way.

Learn More About Square

While you consider whether or not you want to jump in and offer Square Installments as an option for your customers, check out some of the other reviews for Square services. Find out how much Square charges for their primary services and get armed with more information about Square processing to see if these payment options are right for your business. If you want to see the service for yourself, sign up for a free Square account today and check it out!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post How Does Customer Financing With Square Installments Work? appeared first on Merchant Maverick.

“”

A Guide To Square Credit Card Readers And POS Bundles

 

Square made its name offering a free mobile credit card swiper, but the company has expanded so much in the past few years that there is now a massive array of hardware options, catering to all types of businesses. You can still get mobile card readers from Square if you don’t need more than just a phone or tablet and a swiper, but you can also get a countertop POS system complete with a customer-facing display, or a slim, portable credit card terminal with a phone-sized high-resolution screen and built-in receipt printer. And if you’d like to print paper receipts and have an automated cash drawer, Square offers a wide range of compatible hardware. You can even save some money by opting for one of Square’s ready-made bundles of hardware.

Let’s take a look at Square’s hardware options, including its mobile readers, POS systems, and POS kits. We’ll start with simplest options and move on to the most comprehensive kits. We’ll also talk about what you can do to control your costs and manage your cash flow with Square’s financing.

If you’re still curious about Square’s offerings, we also recommend checking out our complete, in-depth review of Square, which covers hardware as well as the software.

Square Mobile Card Readers

Square’s mobile card readers are meant to work with smartphones and tablets — unlike with some of the company’s “all in one” hardware solutions, if you go with a card reader it’s a “bring your own device” situation. Square’s mobile readers are ideal for businesses that are always on the go — farmer’s market stalls, service businesses, food trucks, etc. These card readers work with any of Square’s POS apps as well. However, compatibility with specific tablets or smartphones will vary — and you should check before you buy that a card reader is compatible with your device. Square has a helpful compatibility checker tool on its website for this purpose.

Square Magstripe Readers

Square has been offering free basic magstripe readers for years. The boxy design hasn’t changed significantly over the years and it’s simple to use. Recently, the company added a Lightning connector variant in addition to the 3.5mm headphone jack connector. Square used to sell a 3.5mm adapter, but that’s no longer available (because it’s no longer necessary). However, I will say that adapters from other makers will work for the same purpose.

New Square merchants get 1 free card reader; additional card readers sell for a very reasonable $10. Unlike PayPal Here, Square doesn’t impose any limits or restrictions on transactions processed with a magstripe reader — there’s no limit to the number of swiped transactions you can process before you trigger a hold. That’s a nice touch. However, if you do process large transactions or do a significant volume of credit card payments you should definitely look at upgrading to a chip card-capable reader.

Magstripe Reader Quick Facts 

  • Free for new merchants
  • $10 retail price
  • 3.5mm headphone jack or lightning port connectors
  • Supports magstripe transactions

Square Chip Card Reader

 

Square’s first chip card reader wasn’t particularly fancy, or even all that different from its elder sibling: it was boxy, with a headphone jack connector. And it has since fallen out of favor — partly thanks to Apple and its removal of the headphone jack on its iPhones. However, this entry-level chip card reader is still available at a reasonable price — ideal for merchants who want to accept chip cards but also save some money.

Square doesn’t offer a lightning connector variant for the Chip Card Reader, but as I mentioned, a Lightning to 3.5mm headphone jack adapter would work for iPhone users. This reader also requires the occasional battery charge because of the addition of the chip reader.

Chip Card Reader Fast Facts 

  • $35
  • 3.5 mm headphone jack connector
  • Requires battery charging
  • Supports magstripe and chip card transactions

Square Contactless + Chip Reader

Square’s Contactless + Chip Reader is a departure from Square’s earlier mobile credit card readers. First, it connects via Bluetooth. Second, it doesn’t support magstripe transactions at all. Instead, Square includes one of its free magstripe reader in the box as well. (To be honest, this design kind of disappoints me, but I figure that the Contactless + Chip Reader was designed to add EMV support to the Square Stand, which already has an integrated magstripe reader. So building magstripe support into the Contactless + Chip Reader was a moot point. Still, for merchants who don’t have a Square Stand, this might prove to be a small annoyance if the chip reader can’t read a card properly.)

Square also sells a charging dock, which can be plugged into a wall, or into the Square Stand’s USB hub. It sells for $29 separately. You can use it in a countertop retail environment and let customers insert their payment cards themselves, or you can set the dock aside and grab the reader by itself whenever you need to make a transaction.

Contactless + Chip Reader Fast Facts 

  • $49
  • Charging dock sold separately ($29)
  • Bluetooth connection
  • Supports chip card and contactless transactions
  • Basic magstripe reader also included

Square Countertop POS Devices

If you’d like something a little bit more permanent and stationary in your POS setup, Square offer options tailored to different environments. The offerings here get a little more complex, so bear with me!

Square Stand

The Square Stand has been one of the company’s core offerings for a long time — it is a tablet stand with a built-in card reader, all for a reasonable price (at launch, it cost $99). It swivels, it has minimal cords, and it looks good. Square has improved it slightly with the bundling of the Contactless + Chip Reader. That brings the price to $169.

Square doesn’t include a receipt printer for the Stand, but a printer is available in hardware bundles. Likewise, Square doesn’t include an iPad with the Stand, but you can purchase one directly from Square for an additional $329. Keep in mind that the current edition of the Square Stand only works for the most recent iPad models. If you have an older iPad, you can order a legacy stand from Square for $99, but the Contactless + Chip Reader requires iOS 9.3.5 or higher, and that version of iOS isn’t supported on an iPad 2 or other earlier models.

Because the Square Stand runs an iPad, it can also support merchants using Square Point of Sale, Square for Retail, or Square for Restaurants. There are an assortment of recommended hardware bundles for the Square stand, but if you prefer to build your own setup, you will be happy to know that the Square Stand supports USB, Ethernet, WiFi and Bluetooth printers, as well as other devices.

Square Stand Fast Facts 

  • Accepts magstripe, chip card, and contactless transactions
  • $169 (iPad sold separately)
  • Includes Contactless + Chip Reader (integrated magstripe reader in stand)
  • Compatible with Square Point of Sale, Square for Restaurants, Square for Retail, Square Appointments

Square Terminal

Square Terminal (read our review), the newest addition to Square’s lineup of hardware, takes the concept of the Square Stand and the traditional credit card terminal and combines them into one portable machine. The display is large enough to be a fully functioning POS (it runs Square Point of Sale, the free app). It accepts magstripe, chip card, and contactless transactions. It even has a built-in thermal receipt printer.

While you can operate Terminal by keeping it plugged in, Square promises the battery will last all day if you prefer to go wireless. You also get a cleverly-designed power brick and USB hub to connect accessories, such as the USB barcode scanner and cash drawer. Bluetooth accessories aren’t supported, so the USB hub will be important for some merchants.

While Terminal runs Square Point of Sale, it also offers some compatibility with the iPad-based premium POS app, Square for Restaurants. Specifically, Terminal can be used for tableside ordering and payments. It doesn’t support all of Square for Restaurant’s features, though, so it’s important that you make sure Terminal will really fit your needs.

Square Terminal Fast Facts 

  • Accepts magstripe, chip card, and contactless transactions
  • $399
  • $300 processing credit for new merchants
  • 2.6% + $0.10 per transaction
  • Compatible with Square Point of Sale (limited compatibility with Square for Restaurants)

Square Register

 

Square Register (read our review) definitely targets a higher-end market, with a price tag of $999 — not counting a cash drawer, receipt printer, or barcode scanner. However, for that price, you get a 13.25-inch screen running Square Point of Sale, as well as a 7-inch consumer-facing screen with integrated support for magstripe, chip card, and contactless transactions.

Square Register runs an Android-based version of Square Point of Sale, which means it’s not compatible with Square for Retail. However, you can take advantage of the back-end features if you opt to subscribe to Square for Retail. Specifically, that means access to the reporting features, including cost of goods sold and profitability reports. Square Register also integrates perfectly with Square Loyalty and allows customers to see the status of their loyalty accounts.

All in all, Square Register is an absolutely gorgeous piece of hardware that would look great in a retail space. The addition of the customer-facing display, combined with all of the supported hardware, brings Register on par with more traditional countertop POS systems.

Square Register Fast Facts

  • Accepts magstripe, chip card, and contactless transactions
  • $999
  • 2.5% + $0.10 per transaction
  • Compatible with Square Point of Sale (back end features compatible with Square for Retail)

Square POS Bundles

Square’s POS Kits are available for the Square Stand and Square Register — but if you’d prefer to use a different tablet stand for an iPad, Square also offers some alternatives. It would be a bit redundant and very overwhelming to go through every single bundle that Square offers, so let’s focus on what they offer, broadly speaking.

Square will first ask you to pick a category for your business. The options are limited — just food and beverages, beauty and wellness, or retail. However, those three categories cover a lot of industries. And honestly, you shouldn’t worry too much about picking the right category because the offerings will be similar. Check the options in each category and see which bundle you like.

After you’ve chosen an industry category, Square will also ask you about your Internet setup, specifically whether your business has a router. If you are relying on cellular data, obviously, there’s no router involved. But this question primarily affects what kind of printer Square includes in its bundles.

The biggest advantage to choosing a Square POS kit is the cost savings. Buying individual accessories from Square will cost more than buying a bundle. Square lists the prices as “starting at” for most bundles, but that’s usually because you have the option of purchasing an iPad direct from Square. (Note that you can only get the most recent model of iPad. Square offers POS bundles that support the iPad 2, for example, but you’ll have to acquire the iPad separately.)

Let’s start by looking at what the Square Register and Square Stand bundles look like, versus the alternative tablet stands.

Square Stand POS Kit

 

Square Stand on its own is pretty affordable, but if you opt for the bundle with the stand over buying individual components, you’ll save a small amount. Square suggests running the Stand with a router setup, which includes a USB hub for accessories, rather than wireless options. Your Square Stand Kit includes the following:

  • Receipt printer paper (25 rolls)
  • USB Receipt Printer
  • 16 in. Printer-Driven Cash Drawer
  • Square Stand for Contactless and Chip

If you decide against the Square Stand Kit, keep in mind that you can use any piece of hardware that works with an iPad running Square Point of Sale, as well as USB-enabled devices. That includes barcode scanners and receipt and kitchen printers in addition to cash drawers.

Square Register POS Kit

The POS kit for Square Register will add $530 to the cost, but it will save you $67 over buying the parts individually. (Also take note: You can’t order just the hardware bundle separate from the Register.)

In addition to the Register itself, the kit includes:

  • 16 in. USB Cash Drawer
  • USB Receipt Printer
  • Receipt printer paper (25 rolls)
  • Square Register

Square only recommends the Register kit for businesses with routers, not mobile setups. That’s not too surprising because it’s clearly not a mobile setup. Register does support some USB and Ethernet printers (and one WiFi printer), but it does not support as many devices as the Square Stand or just a standalone iPad. Square also offers compatible kitchen printers, which aren’t included in the bundles for food and beverage businesses, surprisingly.

Other Square POS Kits

If you’d still like to use Square on a tablet — but without the Register or Square Stand — you can get a selection of Heckler brand tablet stands designed for iPads, as well as Galaxy Tab A devices. They contain the following:

  • A tablet stand
  • A printer (Ethernet or Bluetooth)
  • Cash drawer
  • Receipt printer paper
  • Card reader (Magstripe or Contactless + Chip)

Prices vary by the tablet stand model, as well as whether the kit includes an Ethernet or wireless printer. Which card reader Square includes depends on the model of iPad (remember, early models of iPad can’t upgrade to the iOS version required to support the Contactless + Chip Reader). And again, you can mix and match tablet stands and other devices to create a custom setup, though you will ultimately pay more than if you chose one of Square’s pre-made bundles.

Other Square Accessories

When you check out Square’s hardware shop, you can also browse standalone accessories for Square’s products. I like that the site has added the ability to filter compatible accessories by the POS device. The available accessories include kitchen printers, USB and Bluetooth barcode scanners, WiFi routers, and more. However, these are far from your only options. Square actually supports an extensive array of hardware in addition to the options available directly through its own shop. And it’s great about publishing that list of confirmed, supported devices.

Should You Finance Your Square Hardware Purchase?

There’s one last factor to consider when shopping for hardware from Square: the cost. If you are worried about the price of Square’s hardware, or the overall price of accessories, you’ll be glad to know that Square offers financing on purchases of $49 or more. Generally, the limit is $5,000, but you can apply for an increased limit. Depending on the total sum you’re financing, Square offers payback terms of 3, 6, 12 and 24 months.

Square will deduct your payments from your total processing volume before disbursing funds to your bank, so you don’t have to worry about making monthly payments. Eligibility depends on a credit check, and the financing program isn’t available in all U.S. states yet. However, if you are eligible, this could be a great option.

Square’s markup for financing is incredibly reasonable, and the program is managed by Square directly so you don’t have to worry about a shady third-party stepping in. If you can’t afford the upfront investment in hardware, Square’s financing can help you manage your cash flow better. And I like that it’s not a leasing program — when you’re done paying off the hardware, you own it.

Which Square Hardware Is Right For You?

If your business is primarily on the go, you can get a cheap, affordable mobile card reader. If you’d like a countertop setup, there’s Square Terminal with its very small profile, Square Stand for a good entry-level piece of hardware, and of course, Square Register. Plus, the bundled kits from Square allow you to easily add a cash drawer, receipt printer, and any other hardware you need. The number of options can seem overwhelming, but it really comes down to how portable you need your hardware to be and what you can afford.

One of my absolute favorite things about Square is that the company offers a huge array of very affordable hardware for all types of businesses. Some companies might only offer a few options, use expensive leases, or charge an arm and a leg just for a single terminal. You don’t have to worry about that with Square. The price is right and there are hardware options to suit every business that work with all of Square’s Point of Sale apps. That’s a very powerful reason to go with Square already. Throw in the affordable credit card processing and the great customer service, and it’s easy to see why Square is a favorite among small businesses.

If you’re still just learning about Square, be sure to read our complete Square Review! You can also check out our Square Point of Sale, Square for Retail, and Square for Restaurants reviews to learn more about the point of sale systems.

Thanks for reading! Leave us your thoughts and your questions in the comments below!

The post A Guide To Square Credit Card Readers And POS Bundles appeared first on Merchant Maverick.

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The Complete Guide to PayPal’s Fees, Rates, and Pricing

As a consumer mobile wallet, PayPal is darn-near ubiquitous. But with more than 17 million merchants worldwide calling PayPal their payments processor, it’s also a massive force in the merchant services industry. So if you’re looking for a quick and easy way to get set up with credit card payments, whether for a POS system or online, PayPal is probably going to be on your radar, and with good reason.

But should you choose PayPal as your payments processor, and what will it cost? The good news is that PayPal offers transparent, pay-as-you-go pricing with no monthly fees, no account termination fees, or other hidden costs. You can predict fairly well what you’ll pay with PayPal, and all payment processing fees are deducted before PayPal deposits funds in your account.

The one major drawback is that PayPal is a third-party processor, also referred to as an aggregator. That means the company essentially onboards merchants as sub-users of one, giant merchant account that includes the entirety of PayPal’s merchant base. This means that the company does minimal underwriting before approving an account. You don’t need to provide much info beyond confirming your identity to open an account. However, this does mean you face a greater amount of scrutiny after opening an account, and PayPal can terminate your account or place a hold on funds with no notice to you.

That sounds worrisome, but the reality is it only happens to a small percentage of merchants. You can also take steps to protect yourself by recognizing the common red flags that processors look for and avoiding them. Check out our article on how to avoid merchant accounts holds and terminations to learn more.

PayPal obviously isn’t the right choice for everyone. There are restrictions on the types of products merchants can offer, and it doesn’t support certain business models. High-risk businesses should look somewhere else for a merchant account. However, most merchants should be fine with a PayPal account for payment processing.

Read on for a closer look at what you can expect to pay with PayPal as your business’ credit card processor! You can also check out our PayPal and PayPal Here reviews for a focused look at the products and services.

Payment Processing Fees

The major concern for most merchants who use (or are considering using) PayPal are the payment processing costs, so we’ll start there. PayPal offers predictable, flat-rate pricing for all merchants. You don’t have to worry about higher interchange for American Express cards, or MCCs, or qualified vs non-qualified transactions. Your exact rate will depend on the type of transaction.

Merchants who use PayPal’s mPOS app, PayPal Here, or integrate with one of PayPal’s POS partners (such as Vend), will pay the following for in-person transactions:

  • 2.7% per swiped, dipped or tapped transaction
  • 3.5 + $0.15 per keyed transaction

For online transactions, including monthly subscription charges, donations, and digital invoices, PayPal charges the following:

  • 2.9% + $0.30 per online transaction

That’s it. Really. The simplicity of PayPal’s pricing is one of the biggest draws for merchants. You can predict fairly easily what your pricing will be and, because PayPal deducts its fees before depositing funds in your account, you don’t have to worry about an end-of-the-month invoice or going over a limit and incurring additional fees.

What About Alternative Payment Processing Rates?

If you’re wondering whether PayPal offers any sort of alternative payment plans, the answer is yes. Merchants with an average transaction size under $10 can opt for the micropayments plan. PayPal also offers a nonprofit discount for online transactions to qualified 501(c)(3) nonprofits.

  • Micropayments Plan: 5% + $0.05 per transaction. (Note: This rate applies to all transactions, even those above $10)
  • Nonprofit Discount (Online Only): 2.2% + $0.30 per transaction

If you integrate with one of PayPal’s partner POS systems, such as Vend or TouchBistro, you may be eligible for special discounts  (presumably volume-based) or other promotions. However, these offers aren’t clearly disclosed, just advertised on the POS software sites.

Other PayPal Fees For Payment Processing

While PayPal does charge a few extra fees relating to payment processing, they aren’t many. But these are what you might come across:

  • 1.5% Cross-Border Transaction Fee: For US merchants who accept online payments from buyers out of the country, or in-person transactions involving a card from outside the US, PayPal charges a 1.5% cross-border fee. That means, for example, that a US merchant accepting a Canadian card at a POS terminal will pay 4% of the transaction value to PayPal.
  • 2.5% Currency Conversion Fee:  If PayPal has to convert the currency before it deposits the funds in your account, you’ll pay another 2.5% conversion fee. Whether you have to pay the conversion fee depends on the customer’s bank and whether it will handle the currency conversion (usually at a cost to the customer).
  • $20 Chargeback Fee: Chargeback fees are pretty standard, and if a customer files a chargeback against you, PayPal will assess a $20 fee in addition to withdrawing the funds to cover the transaction amount.
  • Refund Fee: In the event of a refund, PayPal will refund the percentage-based fee from the transaction to you, but keep the fixed fee. For most in-person transactions that means you’ll pay nothing. However, refunds on keyed transactions mean you’ll pay $0.15. Refunds on online or invoiced transactions will cost $0.30. PayPal can be a bit confusing about how this works in its transaction summaries, but be aware that you will pay a fee for most refunded transactions, albeit a small one.
  • 1% Instant Transfer Fee: If you’d like to move your PayPal balance to a bank account immediately, you can do that — for a fee. PayPal charges merchants 1% of the transfer value, capped at $10 per transfer, but your funds will be available typically within 30 minutes (s0 long as your bank’s system isn’t incredibly slow). You’ll have to connect an eligible debit card to support instant transfers as well. However, if you prefer to have instant access to funds without paying a fee, don’t forget that PayPal offers a business debit card that’s linked to your PayPal balance, too.

Software Fees

One of the big draws for PayPal is the lack of software fees. Instead of paying a monthly fee for PayPal’s ecommerce features, you pay only the payment transaction costs (in most circumstances — but we’ll come back to this in a moment). While you’ll need to arrange for your own domain and web hosting, you can implement PayPal’s “buy” and “donate” buttons with no additional costs. You can send digital invoices for free and only pay the transaction cost when the invoice is paid.

Likewise, access to PayPal’s mPOS app, PayPal Here (read our review) is also free. However, if you opt to integrate PayPal into a POS app, invoicing software, or another platform, you’ll be responsible for those software costs. PayPal doesn’t charge anything for use of the integration.

Also, take note: PayPal doesn’t charge merchants any PCI compliance fees, account maintenance fees, customer service fees, or termination/account closure fees.

However, PayPal does offer a couple of advanced software options that come with additional costs:

  • PayPal Payments Pro: The “Pro” plan from PayPal has two advantages. One, it includes a virtual terminal to accept payments over the phone by keying in a card from a browser window.  Two, it allows merchants to keep the checkout process on their own website rather than redirecting to PayPal to complete a transaction. This does come with a couple of concerns. For one, you’re not automatically PCI compliant and you’ll need to take additional steps to handle your PCI compliance. Two, $30/month for a virtual terminal is pretty pricey considering you’ll still pay higher rates than swiped/dipped/tapped transactions. Square and Shopify both offer free virtual terminals. Also, opting for PayPal Payments Pro and the Virtual Terminal will mean a few different transaction fees to worry about:
    • 3.5% American Express Fee: Any Amex cards will process at the higher 3.5% rate if you’re on the Pro plan.
    • 3.1% + $0.30 Virtual Terminal Fee: Any transactions processed through PayPal’s Virtual Terminal process at 3.1% + $0.30, plus the international transaction fee if applicable.
  • Recurring Billing: If you’d like to sell subscriptions (software, gift boxes, etc.), PayPal does offer a set of recurring billing tools. Recurring payments are available with PayPal’s Express Checkout Option at no additional charge, but if you have PayPal Payments Pro and want advanced tools, they’ll cost you $10/month. This doesn’t apply to “Donate” buttons, which have their own option for donors to choose between a one-time or recurring donation.

  • Mass Payouts: If you need to distribute funds to multiple parties, PayPal’s Mass Payouts feature might be an appealing option. You have two options here: using PayPal’s API to handle the command, or uploading a spreadsheet. Which method you choose affects how much you pay — if you opt to upload a spreadsheet through PayPal’s website, you’ll pay 2% per transaction, capped at a maximum $1 USD, which is pretty reasonable. If you opt for the API, you’ll pay a flat fee of $0.25 USD per payment. This is a great way to distribute payments to contractors, for example, or manage marketplace payments if you use PayPal’s platform.

PayPal Hardware Costs

Unless you’re integrating PayPal with a POS system or using the free mPOS, PayPal Here, you won’t have to worry about hardware costs. But if you do, you’ll have a few options for card readers:

  • Chip & Swipe Reader: PayPal’s entry-level chip reader sells for $24.99. In addition to EMV capabilities it supports magstripe transactions, but no contactless payments. However, it does connect to phones and tablets via Bluetooth and comes with a convenient mounting clip.
  • Chip & Tap Reader: To get a credit card reader that supports magstripe, EMV, and contactless payments, you’ll need the Chip and Tap reader, which sells for $59.99. We’ve already reviewed this reader as well as the optional charging dock ($30 separately, or bundled for $79.99), with a very positive rating. Again, the Chip and Tap reader connects via Bluetooth. In addition to the charging dock, it comes with a convenient mounting clip.
  • Chip Card Reader: The Chip Card Reader was the first EMV-enabled card reader PayPal offered, and it’s still the only hardware option for merchants who want to integrate with one of PayPal’s POS partners. It sells for $99 on the PayPal site, with an optional charging dock. Given the price point, it shouldn’t surprise you to learn that this all-in-one reader connects via Bluetooth.

  • Mobile Card Reader: PayPal used to offer its entry-level swipe-only reader for free, but now it sells for $15 because PayPal, like most processors, really wants you to start accepting EMV. Use of the mobile reader comes with limitations on accounts, so if you do a decent volume of credit card transactions and don’t want to encounter any holds on your funds, you should avoid the mobile reader at all costs:

*Key-in transactions and sales over $500 in a 7-day period made with the Mobile Card Reader are subject to an automatic 30-day reserve where funds are held in your PayPal account to cover the high risk associated with these types of transactions. For increased protection from fraudulent transactions, we recommend using a chip card reader. All PayPal accounts are subject to policies that can lead to account restrictions in the form of holds, limitations, or reserves. Additional information about these policies can be found in the PayPal User Agreement.

Apart from the cardreaders, PayPal doesn’t offer any proprietary hardware. If you need a countertop register setup, you can choose from an array of tablet stands, receipt printers, and cash drawers. A few select models are confirmed to work, while many others are “unofficially supported” in that they’re likely to work in most cases. The PayPal Here app doesn’t officially support any external barcode scanners (it supports in-app scanning using the device’s camera), but Bluetooth-enabled scanners may work with your setup.

Is PayPal Actually a Good Value?

We’ve talked pretty extensively about the cost of using PayPal, but we haven’t really talked about value. Because value is so much more than just the actual, physical cost. Value encompasses convenience, customer service, and other extra factors that could easily justify paying more than the absolute lowest prices.

PayPal isn’t the absolute cheapest processor out there — especially not for businesses that handle more than $10,000/month in credit card transactions. Larger businesses may be eligible for merchant accounts with volume discounts. For low-volume businesses, PayPal often does offer more competitive pricing because of the lack of monthly fees. The flat-rate pricing, especially for in-person transactions, can mean cost savings over interchange-plus.

But the real value in PayPal is the massive consumer trust and convenience. Just about everyone recognizes the PayPal name, and with 200+ million consumer users around the world, it’s safe to say a lot of people have PayPal accounts. The barriers to entry are minimal — you don’t need a huge amount of technological experience to implement PayPal for in-person or online payments. As long as you aren’t using PayPal Payments Pro, you don’t even have to worry about PCI compliance. PayPal handles it for you, at no additional cost.

Apart from the issue of account terminations or funding holds, the only other consistent complaint about PayPal is its customer service, and reports vary. Some merchants say they’ve never had a problem with customer service. Others say that their support reps have been downright unhelpful when they’ve called in. Fortunately, PayPal offers extensive self-help resources so you should be able to deal with most technical issues without having to contact PayPal directly.

I can’t say unequivocally that PayPal is right for everyone. It’s not. But it is a really good option for a lot of merchants, especially low-volume businesses that are just starting out. For a closer look at PayPal and all its services, we recommend checking out our PayPal and PayPal Here reviews.

If you’re not sure PayPal is right for you, I suggest looking at our Square vs. PayPal article, as the two companies are fairly similar in their business models and offerings.

Thanks for reading! If you have any questions or comments, we’d love to hear from you, so please drop us a comment!

The post The Complete Guide to PayPal’s Fees, Rates, and Pricing appeared first on Merchant Maverick.

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The Best Offshore Merchant Account Providers

Offshore Merchant Account Providers

Ordinary payment processing is complicated. But finding good offshore, international, or high-risk payment solutions can be a real nightmare. If you fall into one of these categories, you’ve likely had your merchant account applications denied at least a few times. Even worse, perhaps you’ve had your processing service terminated and your money withheld from you for months. We understand your struggle. We’ve seen hundreds of businesses go through the exact same thing, and we’re here to help you find the perfect offshore merchant account for your high-risk business.

If you’re just looking for a run-of-the-mill high-risk merchant account for your business, you’ll want to check out our article The Best High-Risk Merchant Account Providers. The high-risk category often includes business types that you wouldn’t normally associate with the term “high-risk,” such as airlines or online furniture sales. While these types of businesses are usually treated as high-risk by banks and processors, they can usually be approved for a domestic merchant account by working with a high-risk specialist.

For our purposes, we’ll use the terms offshore merchant account and international merchant account interchangeably, as they mean the same thing. Both terms refer to a merchant account that is underwritten by a bank or processor that is situated in a different country from the one where the business is located. The most common reasons for needing an offshore account include the following:

  • You do a significant amount of business in a foreign country and need to accept payments in the local currency.
  • Your business has offices in multiple countries, and you need separate merchant accounts for each location.
  • Your business is considered to be so risky that you cannot obtain a regular high-risk merchant account in your own country.

Below, we’ll discuss the factors to evaluate when considering an offshore merchant account and several special features that you’ll want to include in your service. We’ll also profile four offshore merchant account providers that we feel offer superior service and overall value in comparison to their competitors.

Factors To Consider When Selecting An Offshore Merchant Account

While many offshore merchant account providers also specialize in high-risk accounts more generally, not all high-risk processors work with international merchants or provide offshore accounts for domestic merchants. Many high-risk specialists only work with US-based businesses, and only provide accounts through US-based banks and processors. Before you apply for an offshore account, you’ll want to confirm that the company you’re considering works with businesses located in your country. This information might be spelled out explicitly on the provider’s website, or you might have to talk to their sales staff to get a confirmation.

Providers that specialize in setting up offshore merchant accounts can usually get you an account in just about any country around the world, though obviously, there are exceptions. As a US-based merchant, don’t expect to set up your offshore account in a place like Afghanistan or North Korea. It’s simply not going to happen. With the exception of countries limited by political considerations or a high level of instability, however, the possibilities are wide open.

In most cases, you should aim to get an account in a country where you expect to do a significant amount of business. On the other hand, if your business is going to operate exclusively in the United States, an offshore account serves mainly as a last resort for getting a merchant account when you simply can’t get approved for a domestic high-risk account. Banking regulations are more relaxed in certain other countries, and the willingness on the part of banks and processors to work with high-risk businesses is also more favorable. At the same time, you should be aware that setting up an offshore account under these circumstances, while it might be your only option for accepting credit cards, can present some serious risks to you as well. Your ability to pursue a legal remedy against a foreign bank or processor might be severely limited – or even nonexistent. At a minimum, you should consider legally registering your business in the country where your account will be located. Even with legal standing in the country, however, be aware that it might be extremely inconvenient and expensive to pursue a legal action outside of your own country.

There’s also an increased risk that you could become the victim of fraud or identity theft. Banks in other countries collect the same personal data about you and your business that US-based banks do, but they don’t always do as good a job of protecting it. You’ll want to keep an especially close eye on your merchant account, your business account, and any personal accounts about which you’ve released information to get approved for an offshore merchant account.

High-risk merchant accounts are notorious for including higher processing rates and account fees, and offshore accounts can be even worse. Providers know you’re particularly desperate and some, but not all, will take advantage of your situation by charging you as much as they think they can get away with. We recommend that you shop around and compare multiple quotes when looking for an offshore account. Don’t accept the first offer from a bank or processor just because they’re the first one that hasn’t rejected your application due to the nature of your business.

Note that merchant account providers who market offshore accounts often downplay or fail to mention these risk factors, so it’s up to you to look out for yourself. Do your own independent research, compare multiple offers, and thoroughly review all contract documents before you sign up for an account.

Special Features Of Offshore Merchant Accounts

For the most part, you’ll want the same services and features for an offshore account that you would want for a traditional merchant account. This includes processing hardware such as credit card terminals and POS systems for retail merchants, and a robust payment gateway for eCommerce merchants. You’ll also want an online account dashboard of some kind that allows you to monitor your sales in real-time. While online account access is now a standard feature in the United States, you might not always find this feature with an offshore account. Mail-order and telephone-order (MOTO) businesses often find a virtual terminal to be the most cost-effective method for inputting transactions. Depending on the needs of your business, a smartphone- or tablet-based mobile processing system might also be important. Almost all providers offer some type of mobile processing system these days, either as a proprietary product or through a partnership with a third-party provider. Be aware that very few mobile processing systems have begun to offer EMV-compatible card readers, and you’ll often be stuck with a magstripe-only reader.

In addition to these basic merchant account features, there are several special features that your offshore merchant account might (or might not) include. How important these features are to your business will be determined by how you intend to use your account. Extra features to look for in an offshore merchant account include the following:

  • Multi-Currency Support: If you’re going to do business in a foreign country, it only makes sense that you’ll want your customers to be able to pay in their local currency. Multi-currency accounts allow you to maintain balances in multiple currencies and can save you a ton of money in currency conversion costs.
  • Currency Conversion Services: Having an offshore account will invariably require you to convert funds into your own local currency at some point. Most offshore account providers include built-in currency conversion services that allow you to convert foreign funds when it comes time to transfer them to your business account. While these services can sometimes offer you much lower conversion fees than what a bank would charge you, it still pays to shop around for the best deal on this service. You might save money by using an international transfer service such as TransferWise or OFX.
  • Expanded Anti-Fraud Features: Offshore merchant accounts invariably involve a higher degree of risk of fraud than their traditional counterparts, so you’ll want as many extra services to avoid it as you can get. Most offshore account providers offer a number of enhanced anti-fraud features as a standard part of their service. These features automatically detect suspicious activity, hopefully stopping any fraudulent activity before it can affect your business. Providers are increasingly turning to artificial intelligence (AI) features to improve their ability to detect potential fraud beyond what would be possible with a traditional algorithm.

With these considerations in mind, let’s take a brief look at four of our overall favorite offshore merchant account providers:

Durango Merchant Services

Durango Merchant Services is a small merchant account provider headquartered in Durango, Colorado. Established in 1999, the company specializes in providing high-risk and offshore merchant accounts to hard-to-place businesses. They work with a wide variety of banks and processors to find a suitable account for almost any business. While they can’t place 100% of the merchants who apply to them, their track record is very good, and their sales process is so transparent and honest that we’ve even seen praise for the company from merchants who’ve been turned down for an account.

If you need an offshore account, Durango has you covered. Their accounts include multicurrency support as well as enhanced anti-fraud features to keep you protected. They can set up accounts in countries as diverse as Germany, Panama, Spain, and many others.

Durango doesn’t try to set you up with expensive leases when it comes to processing equipment. Instead, they offer a variety of terminals for sale right on their website. Options include both wired and wireless models, with some offerings that support NFC payments. They also sell the iPS Mobile Card Terminal, which connects to a smartphone to provide mobile payments capability in conjunction with the iProcess mobile app. If you’re using a virtual terminal, they sell the MagTek DynaMag, a USB-connected magstripe card reader that attaches to your computer. Unfortunately, it’s Windows-only. Durango currently doesn’t offer any POS systems for sale.

The company supports eCommerce through its proprietary Durango Pay payment gateway, which integrates with the numerous processors the company uses and includes support for most of the popular online shopping carts. Durango’s gateway also features an Authorize.Net Emulator, which allows it to interface with any shopping cart that works with Authorize.Net (see our review).

Because Durango works with such a wide variety of third-party processors to set you up with an offshore merchant account, they don’t list rates or fees on their website. These will vary tremendously depending on which processor they set you up with. While we normally like to see more transparency from merchant account providers, in this case, it’s understandable. Depending on your qualifications, you can expect either an interchange-plus pricing plan or a tiered one. Merchant accounts through Durango don’t seem to have standardized fees. Again, these will depend on the terms that your backend processor imposes.

Durango assigns a dedicated account manager to every one of their merchants, which means you’ll be talking to the same person every time you have an issue. While this can sometimes be problematic outside of regular business hours and when your account manager isn’t available, overall it provides a much higher level of service than you’ll get from a random customer service representative.

Pros

  • Direct sales of processing equipment
  • Reasonable rates and fees based on your business and your backend processor
  • Dedicated account manager for customer service and support

Cons

  • No support for POS systems
  • USB card reader not compatible with Mac computers

For more information about Durango Merchant Services, read our complete review.

SMB Global

SMB Global logo

SMB Global is a new high-risk provider that was spun off from one of our favorite providers, Payline Data in 2016. Headquartered in South Jordan, Utah, the company specializes in providing merchant accounts to high-risk and offshore businesses. Using a variety of backend processors, they’re able to approve a merchant account for almost any high-risk business (including those selling CBD oils). They have an excellent reputation for fair prices and top-notch customer service.

As a newly-established business, SMB Global is still a little rough around the edges, lacking a mobile processing system and credit card terminals for retail merchants. At the same time, they offer a full range of services for eCommerce merchants, including a choice between the NMI Gateway and Authorize.Net.

Because they work with so many banks and processors to get you approved for an account, the company doesn’t offer any pricing information. Processing rates, account fees, and contract terms will all vary widely depending on which backend processor is handling your account. While we highly recommend that you request an interchange-plus pricing plan, be prepared to have to accept a tiered plan instead, particularly if you haven’t been in business for very long. Likewise, you can also expect to have a standard three-year contract with an automatic renewal clause and an early termination fee if you close your account early. As a high-risk merchant, you should be prepared to have a rolling reserve included in your account agreement.

SMB Global requires a minimum processing volume of $50,000 per month for an offshore merchant account, although they will occasionally waive this requirement if your business has a very strong financial history. Offshore accounts support multi-currency processing, allowing you to avoid cross-border fees. They also feature dynamic currency conversion, letting your customers pay in either their local currency or the currency in which you bill them.

Pros

  • Offers international merchant accounts to a wide variety of industries
  • Reasonable pricing and contract terms
  • Excellent customer service

Cons

  • No mobile app
  • No information available about credit card terminals or POS systems

For a more detailed look at SMB Global, be sure to check out our full review.

Host Merchant Services

Host Merchant Services is a relative newcomer to the merchant accounts business, first opening in 2009. The company is headquartered in Newark, Delaware and has a second office in Naples, Florida. While they primarily cater to traditional, low-risk businesses, they can accommodate several categories of high-risk businesses and also offer offshore accounts. Their interchange-plus-only pricing and a full range of products and services make them an excellent choice – if you can get approved. A former web hosting company, HMS is ideally suited for eCommerce merchants. They use TSYS as their primary backend processor, but can also work with several international banks and processors to get you an account.

For retail merchants, HMS offers a variety of Verifone and Equinox (formerly Hypercom) terminals. Terminals are offered for sale, and the company does not lease its equipment. While prices are not disclosed on the HMS website, you should be able to negotiate a very reasonable deal on terminals, especially if you need more than one. If you already have a compatible terminal, they’ll reprogram it for free.

HMS also offers a variety of POS systems that utilize either tablets or touchscreen displays. Choices range from an 8” tablet-based system up to a 17” touchscreen monitor. The company’s Starter, Plus, TouchStation Plus, and Custom POS options should meet the requirements of just about any business that needs or wants a POS system.

If you need a mobile processing capability for your business, HMS has you covered, offering the ProcessNow mobile payments system via a partnership with TSYS. ProcessNow works with either iOS or Android phones, but the current card reader is magstripe-only and requires a headphone jack to plug into.

As a tech-focused company, eCommerce is HMS’ specialty. The company has recently introduced their proprietary Transaction Express payment gateway, which includes a free virtual terminal. HMS also supports a large number of third-party gateways, including Authorize.Net.

HMS uses interchange-plus pricing exclusively for its low-risk merchants, but you might have to pay tiered rates if you have an offshore account. While they don’t disclose their rates on their website, they’re based primarily on monthly processing volume and are very competitive. Fees are not disclosed either, but include a $24.00 annual fee, a $14.99 monthly account fee (which includes PCI compliance), a variable payment gateway fee ($5.00 per month for Transaction Express, $7.50 per month plus $0.05 per transaction for Authorize.Net) and the usual incidental fees (i.e., chargebacks, voice authorizations, etc.). High-risk and offshore merchants should expect to pay higher fees than these, and possibly additional fees as well. In particular, be prepared to have a rolling reserve included as part of your account.

HMS provides customer service and support via 24/7 telephone and email. Chat is available via the HMS website during regular business hours. They also feature an extensive collection of articles and blog posts on their site for customer education. Support quality appears to be well-above-average, based on the almost complete absence of complaints about it on the BBB and other consumer protection websites. If your business falls into one of the categories of high-risk activities that the company can accommodate, HMS is an excellent choice for an offshore merchant account.

Pros

  • Full range of products and services for retail and eCommerce businesses
  • Exclusive interchange-plus pricing plans (for low-risk businesses)
  • Excellent customer service and support

Cons

  • Rates and fees not disclosed on website
  • Can only accommodate a small number of high-risk business categories
  • Mobile card reader not EMV-compliant

For more information, see our complete review.

Easy Pay Direct

Easy Pay Direct logo

Easy Pay Direct is headquartered in Austin, Texas and has been in business since 2000. The company’s primary product is their proprietary EPD Gateway, but they also provide full-service merchant accounts for international, high-risk, and traditional non-high-risk merchants. High-risk merchants will have to pay a premium in terms of processing rates and account fees, whether they’re partnered with a domestic or offshore bank or processor. However, the additional expense is entirely reasonable under the circumstances.

Like most offshore merchant account specialists, Easy Pay Direct works with a variety of banks and processors, both domestic and international, to find one that’s a match for the needs of your business. You’ll have to pay a $99 account setup fee to get started, but considering the extra effort required to underwrite a high-risk or offshore account, we feel the expense is justified in this case. Processing rates will be under a tiered pricing plan, but you should still have some room to negotiate your rates, especially if you have a high monthly processing volume. Contracts generally follow the industry standard, or a three-year initial term that automatically renews for one-year periods after that. One very positive feature about Easy Pay Direct’s contracts is that they do not have an early termination fee, even for high-risk businesses. While this isn’t quite the same thing as true month-to-month billing, it does make it much easier to close your account without penalty if you have to.

One helpful feature offered by Easy Pay Direct is called load balancing, where a business can divide its incoming funds among multiple merchant accounts. This is particularly helpful for high-risk businesses that often exceed the monthly processing volume limits imposed by the processor underwriting their account. Just be aware that you’ll usually have to pay separate monthly fees for each account, so it might not be cost-effective for some merchants. Also, be aware that you might not need this feature if you opt for an offshore account. Underwriting guidelines in some (but by no means all) foreign countries are more relaxed, and you might not have a monthly processing limit imposed on your account at all.

Although Easy Pay Direct doesn’t get as much attention as other, better-known processors, it’s a solid choice for merchants in the high-risk category or those who need an offshore account. We particularly recommend the company for high-risk eCommerce businesses due to the robust feature set of their EPD Gateway.

Pros

  • Load balancing feature for high-risk merchants
  • No equipment leases
  • No early termination fee

Cons

  • $99 account setup fee
  • Three-year contract with automatic renewal clause

Check out our full review of Easy Pay Direct for more information.

Final Thoughts

Having a hard-to-place business doesn’t mean you have to run your company through Bitcoin. You can accept credit card payments just like any other business by finding a payment processor that will set you up with the right acquiring banks. At the same time, you need to be fully aware that, for a US-based business, signing up for an offshore merchant account is a risky endeavor. You’ll want to be very cautious and carefully research any provider you consider, even the ones we’ve recommended above. Take extra care to protect your sensitive personal financial data and be sure your account includes additional fraud prevention features. You might also want to consider registering your business in the country where your merchant account is located – just in case. Having a merchant account in Panama might sound very tempting if you’ve been repeatedly turned down by domestic providers, but it will be very expensive to have to travel there in person if you later run into legal troubles with your account provider.

Of the four offshore merchant account providers we’ve reviewed above, Durango Merchant Services is undoubtedly the best all-around provider of the group. They disclose more detailed information about offshore accounts than any of the other providers. SMB Global is also an excellent choice. While the company itself is very new, they have an impressive track record from their days operating as the high-risk division of Payline Data. Finally, both Easy Pay Direct and Host Merchant Services offer a solid line-up of products and services for both eCommerce and retail merchants. If you need an offshore account to break into the world of accepting credit cards, they both have everything you need to get started.

Finally, we can’t caution you strongly enough that selecting and setting up an offshore merchant account involves a higher level of risk on your part, and you’ll need to be extra cautious in choosing a company to go with. Relaxed underwriting guidelines and a general lack of monthly processing limits make offshore accounts very tempting to merchants who’ve had a hard time getting their business approved for a traditional account, but these advantages come at a price. If anything goes wrong in your relationship with your provider, you might face some real challenges in pursuing a legal remedy. You should also be aware that if this happens, the US-based provider that brokered your account will not be able to help you in most cases.

Do your homework! Research your provider thoroughly and review all contract documents very carefully before signing up. While these steps won’t eliminate the chance of things going sideways somewhere down the road, they will shift the odds considerably in your favor.

The post The Best Offshore Merchant Account Providers appeared first on Merchant Maverick.

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The Cheapest Credit Card Processing Companies

Business owners today know that it’s more important than ever to be able to accept credit cards. Customers carry less cash, and rely on credit and debit cards for the majority of their purchases. If you’re an eCommerce merchant selling online, taking “plastic” is just about your only option. Unfortunately, you can’t accept credit cards unless you have a merchant account, and merchant accounts aren’t free. In fact, they can be very expensive – especially for a small business – if you choose the wrong provider.

The credit card processing industry can be very bewildering, especially for a first-time business owner. There are dozens of companies providing processing services, and each of them offers different processing rates, fees, and contract terms. A provider that’s a good deal for a very small business might be prohibitively expensive for a larger one, and vice versa. Naturally, merchants want to cut through the confusion and get a quick answer to the question “Which one is the cheapest?” There’s nothing wrong with wanting to save money, especially for a new business that has to count every penny. However, if you look up “cheap” in the Merriam-Webster Dictionary, you’ll note that while cheap can mean “charging or obtainable at a low price,” it can also mean “of inferior quality or worth.” If you’ve ever been disappointed with a product purchase when you thought you were getting a good deal, you know that these two definitions often go together.

Here’s a quick look at some of our favorite low-cost credit card processors. Some are free to use. You just pay for the transaction you process. We don’t cover all of these in-depth in this post, but you can check out our complete reviews for all the details. 

The Overall Cheapest Credit Card Processing Companies for 2018

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Best Choice For Small-ticket, Canada, Mobile, eCommerce  All businesses, Mobile, Retail eCommerce, Mobile Canada, Restaurants Large-ticket, All-in-one, Recurring billing
POS and Other Features Included Yes Yes Yes No Yes
Rate Matching/ Negotiable No Yes No Yes Yes
Pricing Structure Flat Rate Interchange-Plus Flat Rate Interchange-Plus Subscription
Retail Rates 2.75% 0.30% + $0.10 2.70% 0.20% + $0.10 0.00% + $0.08
Basic Monthly Fee $0 $0 $9 $9.95 $99

Before we delve into specific processors, there are two important points that you need to understand:

  1. The company offering the lowest processing rates or fees isn’t necessarily the cheapest. The total percentage of your credit card sales that you’ll have to fork over to your merchant account provider isn’t an easy thing to calculate in advance with any precision. Variable processing rates and hidden (or at least unanticipated) fees can easily result in you paying much more than you thought you were going to for processing. Companies offering flat-rate pricing fare much better in this regard, as their simple pricing structure makes it relatively easy to estimate your monthly processing costs.
  2. The “cheapest” processor isn’t necessarily the best one for your business. While you naturally want to be able to accept credit cards while paying the least amount of money for the privilege, companies offering the lowest rates often cut corners in other aspects of their service to make those low rates possible. Poor customer service, for example, is a common problem among the least-expensive processors. If you want the best overall, you might also check out our top picks for small business credit card processing.

Types Of Providers

With the advent of new, low-cost providers, there are now two broad categories of companies providing credit card processing services. These include traditional (or full-service) merchant account providers, and payment services providers, who offer credit card processing, but without some of the features of a full-service merchant account. It’s very important that you understand the difference between the two.

Payment service providers (PSPs) can process your credit card transactions, but they don’t provide you with a unique merchant ID number for your business. Instead, your account is aggregated together with other merchants. This lowers the cost of things like monthly account fees and PCI compliance, but it also means that your account is much more vulnerable to being suddenly frozen or shut down for the slightest hint of fraud. Getting your account working again is complicated by the fact that most PSPs provide little in the way of one-on-one customer service. For a very small business, a PSP may very well be more affordable than a full-service merchant account, especially since you won’t have to pay so many recurring fees just to keep your account open. Be aware, however, that you’ll constantly be running the risk of suddenly losing access to your account and not being able to accept credit cards at all with a PSP. If your business processes a high number of credit card transactions on a daily basis, the loss of business you’ll incur if your account is frozen is quite high. Popular PSPs include PayPal, Square, and Stripe.

Traditional merchant accounts include a number of features you won’t find with most PSPs. The primary distinction is that you will be assigned a merchant identification number that is unique to your business. This number automatically identifies you to processors, issuing banks, and credit card associations. While it might not sound like much, having a unique merchant ID number helps to lower the risk of fraud and improves the stability of your account. While you still might have to endure a hold on funds for an unusually large transaction, the chances of your account being completely frozen for no apparent reason are much less than they are with a PSP. Merchant account providers also offer a host of ancillary services, including PCI security scans, customizable payment gateways for online payments, support for ACH (eCheck) payments, and many others. These bells and whistles don’t come cheap, of course. You’ll pay more in monthly fees than you will for an account with a PSP. However, you’ll also pay lower processing rates, especially if your merchant account provider offers interchange-plus pricing. For many medium-sized and larger businesses, a full-service merchant account will actually be less expensive than a PSP.

How We Chose

We used a number of criteria to determine which processors offered the lowest overall costs and the best service in most situations, including the following:

  • Pricing: Since we’re profiling the cheapest processors in the industry, it should come as no surprise that pricing would be our top criterion. It isn’t that simple, however. Pricing can be very complex, and there are a lot of variables to analyze in making a cost comparison between one provider and another. Fortunately, flat-rate pricing is relatively easy to analyze, as there’s usually little or no variability in the processing rates. Interchange-plus pricing, on the other hand, is very complex, as there are a bewildering number of possible rates charged under the “interchange” portion of the processing rate formula. To get a better idea of just how complicated processing rates can be, check out our Complete Guide to Credit Card Processing Rates & Fees.
  • Contracts: No one wants to be stuck in a long-term contract with an expensive early termination fee if you close your account early, but that’s what many traditional merchant account providers will offer you. All the companies profiled here – including both PSPs and full-service merchant account providers – offer month-to-month contracts. You can close your account and switch to a different provider any time you want, and with no penalty.
  • Hardware: Unless you’re running an eCommerce-only business, you’re going to need some equipment to process your customers’ credit cards. Most of the companies profiled here offer a variety of EMV-compliant credit card terminals, POS systems, and mobile card swipers. Equipment is offered for sale at competitive prices – sometimes it’s even free! You can also buy your own equipment and have it reprogrammed to work with your provider’s service. Note that Stripe is eCommerce-only and PayPal only offers a mobile payment solution through their ancillary service, PayPal Here.
  • eCommerce support: Buying online continues to overtake traditional retail shopping, and all our profiled providers offer support for eCommerce. This includes both a payment gateway to send payment data to the processor and a virtual terminal to allow you to enter transactions on your computer or mobile device. Each provider also offers options for integrating your website with online shopping carts and developer tools for customizing the interface between your site and their services.
  • Customer support: While every provider offers customer support and service, some do a much better job at it than others. We looked for vendors that provided 24/7 telephone support, as well as an online knowledgebase that allows merchants to troubleshoot common problems on their own. As we’ve noted, some PSPs don’t provide very good customer support at all. That’s one of the trade-offs you’ll have to be aware of if you want to go with the “cheapest” option for credit card processing.

Remember, there isn’t a single processor out there that can offer the lowest costs to every merchant. What might be a very inexpensive solution for you might not be such a good deal for someone else. Also, paying the least amount of money for processing won’t be of much use to you if you have to worry about your account suddenly being frozen or shut down, or if the customer service behind your account isn’t adequate to solve technical problems for you when they arise. That said, here are our six top choices for the cheapest credit card processing companies:

Square Payments

Everyone has heard of Square (see our review) by now. With its free Square Reader, app-based payment system, and simple pricing structure, it’s one of the most popular processing services on the market for small businesses. Square’s pay-as-you-go system allows businesses that ordinarily couldn’t afford a merchant account to accept credit cards.

Retail businesses love Square for its low-priced card readers, which replace traditional credit card terminals with a smartphone-based system that’s both affordable and mobile. In addition to a card reader, you’ll need the free Square app, a smartphone, and an Internet connection. Square’s original card reader is free and you’ll receive one when you open your account. However, it can only read magstripe cards and requires a headphone jack to function. Most users will want to shell out a few extra bucks for a newer, EMV-compliant reader. The Square reader is only $49.00, and supports both EMV and NFC-based payment methods. It also uses Bluetooth to connect to your smartphone or tablet – no headphone jack required.

 

Cheapest Mobile Credit Card Processing Company

The Essentials:
✓ $0 monthly fee
✓ 2.75% for all card-present transactions
✓ Exceptional POS app included free
✓ Free credit card reader available
Proprietary software suite includes:
• Point of sale software
• Inventory management
• Mobile app
• Virtual terminal
• Invoicing/billing
• API for custom solutions
Visit the Square website
Read our Square review

Square’s pricing structure is about as simple as it gets. There are no monthly fees whatsoever for a basic account, and none of the types of “hidden” fees that traditional merchant account providers like to tack on. While some advanced features require a monthly subscription, these are entirely optional, and most businesses probably won’t need them. Square’s processing rates are also very simple:

  • 2.75% for all card-present transactions (including magstripe, EMV, and NFC)
  • 2.90% + $0.30 for all invoices and eCommerce transactions
  • 3.50% + $0.15 for all virtual terminal and keyed-in transactions

That’s it! You don’t have to worry about non-qualified transactions, batch fees, or anything else. Funds are deposited into the user’s account within 1-2 business days in most cases. Billing is month-to-month, so you don’t have to worry about long-term contracts and early termination fees. You can quit anytime you want without penalty.

This all sounds great – and it is – if you’re a small business that has to watch every penny and can’t afford to shell out a significant amount of money every month just to have a merchant account. For a larger business, however, Square’s pricing actually isn’t the best deal available. Flat-rate pricing is deliberately on the high side because it has to pay for all the other services that most providers bill you separately for. At a certain point (roughly $10,000 per month in processing volume), you’re actually better off going with a full-service merchant account provider that offers interchange-plus pricing. Yes, you’ll have to pay those pesky account fees, but your processing rates will be so much lower that you’ll save money overall.

Besides high processing rates, Square has a few other drawbacks as well. We’ve already mentioned that your account is much more likely to be frozen or terminated unexpectedly, but what makes this situation worse is that Square’s customer service isn’t so great. The company didn’t even have telephone support for several years after it launched, but it does now. Unfortunately, it’s only available during business hours, and the large number of complaints about it suggests that the quality of support you’ll receive if you call in with a problem is inconsistent at best.

But is it really the cheapest way to go? Well, it depends. For a very small business that doesn’t have a high processing volume, Square’s lack of account fees and predictable pricing can make it very affordable. On the other hand, a larger business with a high processing volume will end up paying much more under those flat-rate prices than it would with an interchange-plus pricing plan.

Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you won’t get a true full-service merchant account. The trade-off is that there’s a much higher chance that your account will be frozen or terminated without notice if fraud is suspected. This might be a minor inconvenience to a retail business that mostly deals in cash and only occasionally takes credit cards, but it’s catastrophic to an eCommerce business where cash isn’t an option.

PROS:

  • No monthly account fees
  • Low-cost EMV-compliant card readers available
  • No long-term contracts or early termination fees

CONS:

  • Not a full-service merchant account; no unique Merchant ID number
  • Frequent account holds and terminations
  • Flat-rate pricing is more expensive than interchange-plus for larger businesses

For a more detailed look at Square, be sure to check out our full review.

Payline Data

Payline Data (see our review) covers all the bases for small business transactions, from mobile and online payments to in-store sales. They offer easy-to-understand pricing plans that are very affordable, especially for low-volume sellers. However, the company’s website fully explains all of the extra features and their associated costs, so you know up front what you’ll have to pay. Payline also stands out from the crowd for their corporate philosophy of charitable giving and support for non-profits through discounted pricing and their “Commercial Co-Venture” program.

 

Cheapest Merchant Account Provider

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pass-through pricing
✓ Outstanding $0 monthly fee option
✓ Exceptional ecommerce shopping cart compatibility
Proprietary software suite includes:
• Excellent mobile processing app
• Easy integration API for customization
• Virtual terminal
• Billing management
Visit the Payline website
Read our Payline review

For brand-new or mobile businesses, Payline Start is the most affordable plan. There’s no monthly fee, and pass-through markup rates are set at 0.30% + $0.10 per transaction. In addition to the free virtual terminal, you’ll also receive a free Ingenico GX5 card reader and the Payline Mobile app to go with it. If you’re looking for value, but want better equipment and lower rates, the Payline Shop plan might be right for you. This plan includes the same features as the Payline Start plan, but lowers your processing rate. The plan costs $10 per month, and markup rates are set at 0.20% + $0.10 per transaction. Mobile businesses and small to medium retailers will benefit the most from this plan.

For more information, see our complete Payline Data review.

CDGcommerce

No account setup fees. No PCI compliance fees. No gateway fees. No monthly minimums, either. There’s a lot of things that CDGcommerce (see our review) doesn’t charge you for, making them a very affordable option for small businesses and those just getting off the ground. They also offer month-to-month contracts with no early termination fee, so in the unlikely event that you aren’t happy with their service, you can close your account without penalty.

So, what do you pay for? Besides processing charges, you’ll only have to pay a $10.00 monthly account fee. This gets you both a full-service merchant account and a payment gateway. You can select either CDG’s own proprietary Quantum gateway or Authorize.Net. Either way, there’s no fee for using the gateway, and no additional per-transaction processing fee. While this is a great deal, you also have the option of adding the cdg360 security package for an extra $15.00 per month. It comes with customized security alerts, PCI-DSS vulnerability scans, and $100,000 in data breach/theft protection. It’s well worth paying a little extra for, especially for eCommerce merchants.

Good Option for Online Payment Processing

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pass-through pricing
✓ Free payment gateway option with activation within an hour
✓ Exceptional ecommerce shopping cart compatibility
✓ Over 20 years with excellent reputation
Proprietary fraud prevention suite includes:
• Automatic high-risk order detection
• Dialverify phone order verification
• Cardholder authentication (VbV/MSC)
• Chargeback defender
• Easy integration and API for customization
Visit the CDGcommerce website
Read our CDGcommerce review

We don’t recommend leasing a credit card terminal, but CDG has a program that’s very different from traditional leases, and is actually a good deal. For only $79 per year (for terminal insurance), CDG will provide you with a terminal and keep it updated. This works out to $6.58 per month, a fraction of what most terminal leasing companies will charge you. If you need a wireless terminal, you’ll also have to pay $20.00 per month for wireless data and an additional $0.05 per transaction in processing fees.

You won’t need to negotiate with CDG to figure out your processing rates. All their rate plans are interchange-plus and are fully disclosed on their website. The company offers a choice between Simplified and Advanced pricing plans, with Simplified pricing being designed for merchants processing less than $10,000 per month, and Advanced pricing being for those processing $10,000 or more per month. Here are their current rates:

Simplified Pricing:

  • Online: interchange + 0.30% + $0.15 per transaction
  • Retail (swipe or POS): interchange + 0.25% + $0.10 per transaction
  • Mobile: interchange + 0.25% + $0.10 per transaction
  • Non-profit: interchange + 0.20% + $0.10 per transaction

With very low account fees and competitive interchange-plus processing rates, CDGcommerce offers a great combination of price and value. If you’ve been using Square or PayPal and want to upgrade to a full-service merchant account, they’re an excellent option.

PROS:

  • Interchange-plus pricing
  • Month-to-month billing with no long-term contracts or early termination fees
  • Free payment gateway with virtual terminal
  • Excellent customer service

CONS:

  • Only available to US-based merchants

For more information, see our complete review here.

Dharma Merchant Services

Headquartered in downtown San Francisco, California, it should come as no surprise that Dharma Merchant Services (see our review) is far more socially responsible than just about any other merchant account provider in the industry. For you, that enlightened corporate philosophy translates into fair and transparent pricing, reasonable contract terms, and excellent customer support.

Because they don’t try to squeeze extra money out of struggling small business owners, you won’t have to pay an account setup fee or an annual fee. There’s no monthly minimum, either. You will pay a $10.00 monthly fee and a $7.95 per month fee for PCI compliance. Other fees (most of which are per-occurrence, such as chargeback fees) are fully disclosed on their website. Like many of our other favorite processors, Dharma doesn’t have long-term contracts, either. Billing is month-to-month, and there’s no early termination fee if you close your account.

Dharma Merchant Services review

Good Option for Nonprofits and B2B Payments

The Essentials:
✓ Provides discounted rates for nonprofits
✓ Exceptional customer service
✓ Transparent interchange-plus pass-through pricing
✓ Proven track record with nonprofits
Free MX Merchant Software includes:
• Level 2 and level 3 data for lower interchange rates on B2B processing
• Virtual terminal
• Invoicing/billing
Visit the Dharma Merchant Services website
Read our Dharma Merchant Services review

The company uses interchange-plus pricing exclusively and lists their rates right on their website. Here’s their current processing rate information:

  • Storefront: interchange + 0.25% + $0.10 per transaction
  • Virtual: interchange + 0.35% + $0.15 per transaction
  • Restaurant: interchange + 0.20% + $0.07 per transaction

If you need a terminal, Dharma will sell you either the First Data FD-130 or Verifone Vx520. They’ll also reprogram your existing terminal, if you have one. Need a POS system? Dharma offers the Clover Mini, and will sell it to you outright rather than leasing it. If you need a mobile payments system instead, Dharma offers the Clover Go for $99.00, plus a $10.00 monthly fee. For $139, you can upgrade to the Clover Go Contactless, which connects via Bluetooth instead of your phone’s headphone jack.

Dharma doesn’t have a minimum monthly volume requirement, but they do acknowledge that their fees and rates aren’t the lowest on the market for businesses that process less than $10,000 per month. You’re still free to sign up if you need a full-service merchant account, but they recommend either PayPal or Square if you don’t.

PROS:

  • Transparent interchange-plus pricing
  • Minimal account fees
  • Full range of services and equipment for both retail and online businesses
  • Great customer support

CONS:

  • Not a good fit for low-volume (less than $10,000 per month) accounts

For more information on Dharma, see our complete review here.

Helcim

Headquartered up in the Great White North, Helcim (see our review) provides outstanding service and affordable prices to both Canadian and US-based merchants. They offer interchange-plus pricing exclusively, and their website features one of the most detailed and transparent explanations of their rates and fees that you’ll find anywhere.

Transparency and honesty are major themes with Helcim, which is something you won’t often find with many other providers. Reading their website will give you a quick education on all the sneaky, misleading tricks that other companies use to squeeze more money out of their merchants. Fortunately, you won’t have to worry about this kind of behavior with Helcim. Not only do they fully disclose their processing rates, account fees, and contract terms, but they also provide all their services at fair, competitive prices.

 

Good Option for Canadian Businesses

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pricing
✓ Exceptional reputation in Canada
✓ High-quality all-in-one payment platform
✓ Great educational material
Proprietary Helcim Commerce solution includes:
• Point of sale software
• Inventory management
• Billing and invoicing
• Virtual terminal
Visit the Helcim website
Read our Helcim review

Unlike many of their competitors, Helcim encourages merchants to buy their credit card terminals outright rather than leasing them. The company offers a number of popular models, most of which are EMV-compliant. For a little extra cash up front, you can also get an NFC-capable terminal that supports Apple Pay and other similar mobile payment methods. If you already have a terminal, they’ll reprogram it to work with their system for free. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best choice for Canadian merchants.

Helcim offers three basic pricing plans: a Retail Plan, an eCommerce Plan, and a combined Retail + eCommerce Plan. The Retail Plan costs a flat $15.00 per month. This fee covers PCI compliance, and there are no account setup or statement fees. There’s also no monthly minimum. All swiped transactions are processed at a rate of interchange + 0.25% + $0.08 per transaction.

Helcim’s eCommerce Plan works the same way, but it costs $35.00 per month. This gives you access to the company’s proprietary Helcim Payment Gateway, which includes support for recurring billing, a customer information storage system, shopping cart integration, and a customizable payment gateway API. The plan also includes a virtual terminal that allows mail order or telephone order businesses to key in transactions on any computer. All online (i.e., card-not-present) transactions are processed at a rate of interchange + 0.45% + $0.25 per transaction.

The Retail + eCommerce Plan includes all features of the other two plans, and costs $50.00 per month. Processing rates are the same as for the other two plans.

There are few downsides to Helcim’s services. One way they’re able to keep costs so low is to exclude high-risk merchants from signing up. This policy lowers the company’s overall risk profile, but it also means you’ll be out of luck if you meet their high-risk criteria. Because they charge a monthly fee (albeit a very reasonable one), they’re also not quite as affordable as Square, PayPal, etc. if you’re processing below $2,500 per month. We’re also still waiting for the company to introduce an EMV-compliant mobile card reader. They currently offer a basic, magstripe-only reader that requires a headphone jack to communicate with your smartphone or tablet.

PROS:

  • Extremely transparent fee structure
  • Very competitive rates for businesses processing over $1,500 per month
  • Excellent customer service and support

CONS:

  • Not suited for very small businesses processing less than $1,500 per month
  • Not available for high-risk merchants
  • Mobile card reader isn’t EMV-compatible

For more information, see our complete review here.

Popular (But Less Reliable) Inexpensive Options

PayPal

Everyone has heard of PayPal (see our review). And just about everyone uses it. With an active user base of almost 200 million customers in 200 markets around the world, it’s a good bet that most of your customers use it, too. But can the company fill all your processing needs? The short answer is yes. PayPal has all the features you would need to run a business – either retail or eCommerce – using just their payment processing services and equipment. But would this be cost-effective? Here’s where it gets complicated. While the company offers flat-rate pricing and no monthly fees for its basic accounts, those flat-rate prices are kind of on the high side. Also, if you need features such as a virtual terminal, your account isn’t free. Instead, it’s $30.00 per month, plus your processing charges.

PayPal doesn’t offer true, full-service merchant accounts. Instead, they function as a payment service provider (PSP), which keeps costs relatively low, but also means that they’re quick on the trigger to freeze your account if they suspect that fraud has occurred. Like most PSPs, they don’t have long-term contracts and don’t charge early termination fees. Billing is month-to-month, and an account that doesn’t have a monthly fee is good for a business that only processes credit card transactions occasionally.

PayPal’s basic rate for online transactions is 2.9% + $0.30 per transaction. International payments and transactions processed through their virtual terminal cost more, while registered charities and mobile payments get a discount. PayPal fully discloses their rates on their website, so you’ll always know in advance what you’ll be paying.

While PayPal is designed primarily for eCommerce businesses, the company also supports retailers through integration with numerous third-party mobile POS systems and their own mobile payments system, PayPal Here. The latter now includes a Bluetooth-enabled EMV card reader. While many companies offer a free virtual terminal, but charge a monthly fee for the payment gateway needed to use it, PayPal does just the opposite. Their PayFlow Payment Gateway comes with no monthly fee, but if you also need a virtual terminal, you’ll pay $30.00 per month for it. There’s also a small additional per-transaction processing charge.

While these are all great features, there are also some not-so-great things about PayPal that you should be aware of before you sign up. Customer support through their telephone support line is very inconsistent. Some customer service representatives are quite knowledgeable and helpful, while others are not. Fortunately, the company provides an online knowledgebase that should help you solve common problems on your own. As we’ve mentioned, sudden account holds or terminations are also a possibility. If you simply can’t afford to lose access to your account temporarily, consider a different option.

For some businesses, PayPal is really all you need. If you don’t need a virtual terminal or any of the other features of the $30 PayPal Payments Pro plan, you can avoid monthly fees altogether and operate on a pay-as-you-go basis. For larger businesses and those with more specialized needs, PayPal makes an excellent secondary payment option on top of your regular merchant account.

PROS:

  • No monthly fees (for standard account)
  • Transparent flat-rate pricing
  • Most customers have a PayPal account

CONS:

  • High flat-rate processing charges
  • Frequent account freezes, holds, and terminations
  • Inconsistent customer support

For more detailed information about PayPal, see our complete review here.

Stripe Payments

Stripe logo

Just like Square is popular with small retail businesses, Stripe (see our review) is the darling of the eCommerce world. The company functions as a payment service provider (PSP), aggregating accounts and keeping costs low for their clients. There are no monthly fees, and their flat-rate processing plan is extremely simple.

Stripe is so focused on eCommerce that they don’t offer much of anything to retailers. There are no credit card terminals, POS systems, or even mobile payments systems for your smartphone or tablet. So, if you’re a retailer, you can skip right on ahead to the next company profiled below. Stripe is not for you.

eCommerce-only merchants, on the other hand, will find a very robust variety of services to help them sell online. Integration is the name of the game at Stripe, and their payments processing service works with just about every online shopping cart on the market. They also have a vast library of APIs that allow businesses to customize the interface between Stripe and their websites. If you’d like to sell your products through your own app as well as on your website, they offer an impressive in-app purchasing capability.

So, how much does all this techy goodness cost? The short answer is not much – at least under certain circumstances. Since all your transactions will be processed online without a physical card being swiped or dipped, Stripe charges a flat 2.9% + $0.30 for all credit and debit card transactions. eCheck (ACH) and Bitcoin payments are charged a mere 0.8% per transaction. This is the same rate that Square and PayPal also charge for online transactions. There are no additional account fees, although you will be charged $15.00 for each chargeback. Chargeback fees are unavoidable with any processor, but unlike most companies, Stripe will refund your money if the chargeback investigation comes out in your favor.

You also won’t have to worry about long-term contracts or early termination fees, as Stripe bills on a month-to-month basis. This is a useful feature for a growing eCommerce business, as Stripe’s flat-rate pricing suffers the same flaw that plagues Square and PayPal: for a high-volume business, their flat-rate pricing is actually more expensive than what a full-service merchant account can provide through interchange-plus pricing.

While Stripe has some very impressive features, it also has a few serious drawbacks. Like other payment service providers (PSPs), account holds and terminations occur frequently and without notice. Stripe uses a machine learning-enabled algorithm to scan accounts for possible fraud, and it’s definitely programmed to err on the side of caution. This wouldn’t be so bad if you could call up a human customer service representative on the phone and resolve the situation. Unfortunately, you can’t – Stripe doesn’t offer telephone support at all. Instead, you’ll have to contact the company through email and wait for a response. Judging from the many complaints about Stripe’s customer service, the quality of those responses leaves a lot to be desired.

Despite its shortcomings, Stripe is a good choice for a new eCommerce venture. You’ll enjoy pay-as-you-go service with no monthly fees, and you won’t have to worry about long-term contracts. The company’s extensive library of developer tools can offer you options that you might not be able to find with other providers. Just be aware that when your business grows beyond a certain point, you’ll need the security and reliability of a full-service merchant account. You’ll also save money on processing charges by switching to interchange-plus pricing.

PROS:

  • Simple flat-rate pricing structure
  • No additional fees or long-term contracts
  • Huge API library for developers

CONS:

  • Flat-rate pricing is more expensive than interchange-plus for high-volume merchants
  • Frequent account holds and terminations
  • No telephone customer support

For more information, see our complete review here.

Final Thoughts

As you’ve probably noticed by now, pricing for credit card processing is a ridiculously complicated subject. With dozens of interchange rates and a wild assortment of fees, trying to figure out how much accepting credit cards is going to cost your business inevitably comes down to guesswork. While you can make a reasonable estimation based on your processing history and your business type, it’s not realistic to expect that you’ll be able to come up with a precise figure. Fortunately, the companies we’ve profiled here fully disclose their processing rates and fees, making your job of estimating your costs much easier.

We’ve only listed six of the most popular and most affordable processors here, so be aware that the cheapest processor for your particular business might not be one of them. There are plenty of other providers out there who are also competing for your business, so check them out, too!

Here are a few very general rules of thumb regarding merchant account pricing:

  • If your business has a low processing volume, you’ll want to find a provider with low monthly and annual fees. One of the most appealing aspects of Square or PayPal is that they don’t charge any monthly fees. This is a great feature if your business is seasonal or you only occasionally have a need to accept credit cards. Processing rates won’t be as important for low-volume merchants.
  • If your business has a high processing volume, fees aren’t as important, and you’ll want to get the lowest processing rates you can find. Paying one or more monthly fees for a merchant account is an insignificant expense for a larger business, but higher processing rates can make a serious dent in your profits.
  • Carefully analyze both the percentage rate and the per-transaction processing fee when evaluating rates. While you’d ideally like them both to be low, which one is more important will depend on your average transaction size. If you process a lot of smaller transactions, a $0.30 per transaction fee can add up quickly. On the other hand, if your transactions are usually larger, you won’t need to be as concerned with the per-transaction fee, and should try to get the lowest percentage rate you can find.

While all the companies we’ve profiled here provide excellent service at an affordable cost, some are better suited to particular types of businesses than others. Square, for example, works best for very small retail businesses. PayPal and Stripe, on the other hand, are a better fit for small eCommerce merchants. Full-service merchant account providers like Helcim, CDGcommerce, and Dharma are more well-rounded, but CDG is a better fit for smaller businesses, while Helcim and Dharma work better with larger ones. For a side-by-side comparison of some of the companies listed here (and a few other excellent providers), please see our Merchant Account Comparison Chart.

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